CFTC sues New Mexico to block state gaming restrictions on prediction markets
The Commodity Futures Trading Commission sued New Mexico on Friday, June 12, 2026, seeking to block the state from enforcing gaming laws against CFTC-regulated prediction market platforms. The suit escalates a multi-directional legal fight that began when New Mexico Attorney General Torrez sued Kalshi last week over sports event contracts. The CFTC asserts that New Mexico is attempting to nullify federal law by imposing state gaming restrictions on federally regulated event contracts, and the agency is asking a federal court for declaratory relief affirming its exclusive jurisdiction plus a permanent injunction against the state's enforcement efforts. The agency has now filed similar preemption litigation against eight states.
Kalshi now faces simultaneous state and federal litigation in New Mexico: defending Torrez's gambling claims in state court while the CFTC pursues parallel federal preemption against the same state action.
Any split ruling between courts risks forcing Kalshi to geofence New Mexico or face contempt exposure. The CFTC's eighth such suit tightens the regulatory vise on platforms caught between federal registration and state enforcement.
New Mexico becomes the eighth state to face CFTC preemption litigation, following parallel federal suits in Rhode Island and Minnesota and deepening the agency's campaign to shield event-contract platforms from state-level gambling enforcement.