Kalshi Faces New Mexico Lawsuit over Event Contracts
SANTA FE, N.M. – New Mexico Attorney General Raúl Torrez has filed a lawsuit against Kalshi, alleging the company is unlawfully offering online sports betting in the state.
LISTEN TO THIS ARTICLE:The lawsuit, filed by the New Mexico Department of Justice, names Kalshi, Inc. and KalshiEX LLC. It claims the company is using sports-related event contracts to offer products that function like wagers while operating outside New Mexico’s gaming laws.
Torrez said the case is intended to protect consumers, preserve state gaming rules and defend the regulatory structure governing legal gambling in New Mexico.
State Says Kalshi Operates Like a Sportsbook
According to the complaint, Kalshi’s platform allows users to wager on sporting events through event contracts that New Mexico officials say work in the same way as traditional sports bets. The attorney general’s office said Kalshi has offered those products to New Mexico residents without obtaining a state gaming licence.
The lawsuit also alleges that Kalshi allowed users aged 18 to 20 to participate, despite New Mexico’s minimum legal gaming age of 21.
“New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability, and respects tribal sovereignty,” Torrez said. The attorney general outlined the case in a lawsuit announcement against Kalshi.
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Tribal Gaming Framework Central to Case
New Mexico’s legal gaming framework includes tribal-state gaming compacts negotiated with sovereign tribal nations.
Torrez said lawful gaming in the state operates either under those compacts or under strict state regulations. He argued that Kalshi has ignored that framework by offering sports-related wagering without the required approval.
The lawsuit claims Kalshi’s operations undermine New Mexico public policy and threaten the state’s authority to regulate gambling within its borders. Revenue from tribal gaming compacts supports public services, economic development and infrastructure projects in tribal communities across the state.
Prediction Market Fight Expands
The New Mexico case adds to the growing legal and regulatory fight over prediction markets in the United States, following a similar move where Washington State sued Kalshi over alleged illegal sports betting.
Kalshi and similar platforms have argued that event contracts are regulated financial products, while several state officials have taken the position that sports-related contracts amount to gambling when offered to residents without gaming licences. New Mexico is seeking injunctive relief to stop Kalshi from offering sports-related wagering through its platform in the state.
The lawsuit is likely to be watched closely because it raises the same core question appearing in other state-level disputes: whether sports event contracts should be treated as federally regulated prediction markets or as sports betting subject to state gaming laws.
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