New Mexico Attorney General sues Kalshi over sports event contracts

New Mexico Attorney General Raúl Torrez has initiated litigation against Kalshi in Santa Fe District Court, asserting that the prediction market operator is conducting sports betting activities without proper licensing under state gaming law. The complaint alleges that Kalshi's business model—allowing users to trade contracts tied to sports outcomes—constitutes unlicensed wagering in violation of New Mexico's regulatory framework.

The lawsuit reflects growing tension between state gaming authorities and the emerging prediction market sector. While prediction markets operate in a legal gray area at the federal level, state regulators increasingly view them as functionally equivalent to sportsbooks and argue they should be subject to the same licensing and oversight requirements.

This action by New Mexico joins a broader wave of state-level challenges to prediction market operators. Multiple jurisdictions have begun scrutinizing whether these platforms fall under existing sports betting prohibitions or gaming statutes. The outcome of cases like New Mexico's could significantly shape how prediction markets operate across the United States and whether they must obtain traditional gaming licenses to continue serving American customers.