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Kalshi is facing legal challenges on two fronts in New Mexico. New Mexico Attorney General Raúl Torrez announced that the New Mexico Department of Justice has filed a lawsuit against Kalshi, Inc. and KalshiEX LLC, alleging the company is unlawfully offering online sports betting in the state while attempting to evade state gaming laws and the carefully negotiated framework that governs legal gaming in New Mexico.
The state’s lawsuit follows a separate suit filed the previous month by four of New Mexico’s tribes.
Tribal casinos are the only option for sports betting in NM
According to the complaint, lawful gaming in New Mexico can only be conducted through tribal-state gaming compacts or state-regulated licensing. The NMDOJ alleges that Kalshi is sidestepping that framework entirely.
The complaint alleges that Kalshi’s prediction market platform allows users to wager on sporting event outcomes through so-called “event contracts” that function in the same manner as traditional sports bets — without any gaming license from the state.
In similar lawsuits across the country, Kalshi has argued that its sports betting contracts are futures trading contracts regulated under the federal Commodity Exchange Act, which it claims preempts state gambling laws and the federal Indian Gaming Regulatory Act.
Torrez defended the lawsuit in a statement:
“New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability and respects tribal sovereignty. 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.”
On May 12, the Pojoaque, Sandia and Isleta pueblos and the Mescalero Apache Tribe filed their own lawsuit, alleging the app’s operation in New Mexico — including taking bets on a recent Lobos-Aggies game — violates tribal sovereignty and state law.
According to Source NM news, the suit also alleges that Kalshi could and should have created a “geofence” to prevent its app from being used within tribal boundaries, and that by operating on tribal land, the company is violating the federal Indian Gaming Regulatory Act and infringing on tribal rights to self-determination.
State accuses Kalshi of allowing underage gambling
The state’s complaint also takes aim at Kalshi’s age requirements. NMDOJ pointed out that Kalshi operates with a minimum betting age of 18, three years younger than the minimum age at the state’s tribal casinos. New Mexico’s legal sports betting age is 21.
New Mexico is the seventh state to sue Kalshi, joining a growing list that includes Massachusetts, Michigan, Washington, Wisconsin and Arizona. The Commodity Futures Trading Commission (CFTC) has also filed civil suits against attorneys general and other government leaders in Arizona, Connecticut, Illinois, Minnesota, New York and Wisconsin in a parallel federal effort to assert jurisdiction over prediction market contracts.
The NMDOJ is seeking to halt Kalshi’s operations in New Mexico and prevent the company from continuing to offer sports-related wagering through its platform. Kalshi had not responded to requests for comment on either lawsuit as of publication.
