The state of New Mexico has filed a legal complaint against prediction market Kalshi, alleging that the platform violates state gambling laws while operating as an unlicensed sportsbook. The lawsuit, filed in the 1st Judicial District Court (Santa Fe County) also accuses the exchange of offering underage gambling products to citizens who are between the ages of 18 and 20 years old.
Read: New Mexico v Kalshi (filed June 4, 2026)
In an official statement released Thursday, NM Attorney General Raúl Torrez put forth the state’s gripes with the Kalshi prediction exchange, saying “the company is unlawfully offering online sports betting in New Mexico while attempting to evade state gaming laws and the carefully negotiated framework that governs legal gaming in the state.”
The legal maneuver of filing a formal legal complaint in state courts is viewed by some legal gaming experts as a way to prevent exchanges from moving the respective suits to federal courts, which may be more sympathetic with the CFTC’s claim of exclusive jurisdiction over prediction markets.
The lawsuit heavily cites material published by Next Event Horizon Substack author Dustin Gouker, who has reported extensively on Kalshi’s archived social media interactions that categorize its own sports related event contracts as “bets.” Following a 129-point outline of the state’s complaints against Kalshi, New Mexico charges the prediction market platform with four civil counts:
At the bottom of Page 36, New Mexico requests that the court rule in its favor, while seeking “all legal and equitable as allowed by law.” The suit also aims to permanently enjoin “employees, officers, directors, agents, assigns, successors, subsidiaries, and other persons acting in concert or participation with” Kalshi in an effort to block all activity related to sports event contracts within the state.
Roughly half the country (going by number of states) is now involved in the legal battle that pits state gambling laws against prediction market products. According to the CFTC, the Kalshi exchange is federally regulated under its purview, which nullifies state-based legal challenges that claim prediction markets violate state gaming/gambling laws. “Event contracts, whether on sports, politics, or any commodity, are within the CFTC’s remit. We’ll regulate these markets accordingly,” said CFTC Commissioner Mike Selig earlier this month.
While the New Mexico civil action provides a new plaintiff in the ongoing state-versus-federal government legal battle involving exchanges that offer event contracts on sports events, it does not go as far as a recent criminal prohibition of prediction platforms by Minnesota, which – starting August 1st – makes it a felony to offer “yes/no” forecasts on sports, elections, and entertainment awards. The CFTC has sued Minnesota to block its blanket ban on the activity.
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