New Mexico Attorney General Raúl Torrez has filed suit against prediction market operator Kalshi, arguing the company is offering online sports betting in the state without the licenses required under New Mexico law.
The case, filed Thursday (June 4) in Santa Fe County’s First Judicial District Court, seeks an injunction preventing Kalshi from continuing to offer sports-event contracts to New Mexico residents.
State lawyers contend that Kalshi’s sports contracts function the same way as traditional sports wagers and should be regulated under the state’s gaming framework. The complaint points to the company’s past marketing, including claims that it was “The First Nationwide Legal Sports Betting Platform” and offered “Sports Betting Legal in All 50 States on Kalshi.”
“Despite looking like a sportsbook, acting like a sportsbook, and proverbially quacking like a sportsbook, neither Kalshi nor any of its subsidiaries have sought licensure from New Mexico’s Gaming Control Board or otherwise abided by the State’s laws governing gambling and gaming within its borders,” the complaint states.
According to the filing, Kalshi accepts customer funds, settles winning positions, collects fees and uses a market-making subsidiary that can take the other side of trades. The state argues those activities mirror the role of a sportsbook.
New Mexico lawsuit against Kalshi comes as legal pressure builds against platform
The lawsuit arrives as Kalshi faces mounting opposition from tribal governments and state regulators around the country. Earlier this year, four New Mexico tribes, the Mescalero Apache Tribe, Pueblo of Isleta, Pueblo of Pojoaque and Pueblo of Sandia, filed a separate federal lawsuit challenging the company’s sports contracts.
The tribes argue the contracts amount to Class III gaming under the Indian Gaming Regulatory Act and therefore require tribal authorization. Their complaint says Kalshi permits participation by users as young as 18 and offers products that resemble moneyline bets, point spreads, totals, parlays and proposition wagers.
“Bookmakers have been providing the same service as Kalshi since at least the late 1700s,” the complaint states.
State officials make similar arguments in the new case. They say Kalshi began offering sports-related contracts in January 2025 and now lists markets tied to football, basketball, baseball, golf, mixed martial arts and tennis.
“Kalshi continues to operate as a digital platform for sports betting and continues to operate unlawfully within New Mexico,” the state said in the complaint.
Torrez said the action is intended to protect both consumers and the state’s gaming system.
“New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability, and respects tribal sovereignty,” said Attorney General Torrez in a separate release.
“The only lawful gaming in New Mexico operates either under tribal-state gaming compacts, or under strict state regulations to ensure honest gaming free from corruption, and licenses gaming operators only after they explain how they plan to address compulsive gambling. Kalshi has ignored that framework entirely while offering online sports betting within the state. We are filing this lawsuit to protect the integrity of our laws, our regulatory system, and most importantly, consumers.”
Meanwhile, Kalshi continues to argue in separate litigation, including a Montana federal case, that its exchange is governed by federal commodities law and falls under the Commodity Futures Trading Commission’s authority rather than state gambling regulators.
“By offering unlicensed online sports betting—including to underage players—Kalshi violates numerous provisions of New Mexico’s Criminal Code and Gaming Control Act,” the complaint states.
Featured image: Kalshi / Canva
