New Mexico Attorney General Sues Kalshi, Calling It an Unlicensed Sportsbook Operating in the State

New Mexico Attorney General Raul Torrez filed a lawsuit against prediction market platform Kalshi in state District Court in Santa Fe on June 4, 2026, accusing the company of offering unlawful online sports betting without a state gaming license. The lawsuit, assigned to Judge Matthew Wilson, seeks to halt Kalshi’s operations in New Mexico and prevent the company from continuing to offer sports-related event contracts to state residents.

The action marks another front in a rapidly expanding legal war over prediction markets, with New Mexico joining approximately a dozen states that have filed legal challenges against Kalshi promo code in 2026. It came weeks after four of the state’s tribal nations — the Sandia, Isleta and Pojoaque Pueblos and the Mescalero Apache Tribe — filed their own separate lawsuit in May, arguing Kalshi is violating tribal gaming compacts and federal Indian Gaming Regulatory Act protections by allowing wagers on tribal lands.

What the Lawsuit Claims

Torrez’s complaint centers on the argument that Kalshi’s so-called event contracts are functionally indistinguishable from traditional sports wagers. “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 lawsuit states.

In New Mexico, sports betting is legal but limited to in-person wagering at tribal casinos operating under state gaming compacts. There is no legal framework authorizing online sports betting in the state. Torrez argued that Kalshi’s minimum betting age of 18 — three years younger than the 21-year minimum at tribal casinos — represents an additional violation that exposes younger residents to unlicensed gambling products.

“New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability and respects tribal sovereignty,” Torrez said in a statement. “Kalshi has ignored that framework entirely while offering online sports betting within the state.”

A Nationwide Pattern

The New Mexico lawsuit is part of an increasingly crowded legal landscape. Earlier in 2026, the Third Circuit Court of Appeals issued a 2-1 ruling affirming an injunction that barred New Jersey from enforcing its gambling laws against Kalshi, holding that the platform’s contracts are “swaps” regulated exclusively under the federal Commodity Exchange Act. Kalshi and the Commodity Futures Trading Commission have cited that ruling in arguing that state gambling enforcement is preempted by federal law.

However, courts in other circuits have yet to rule definitively, and the CFTC has filed its own federal lawsuits against multiple states — including Minnesota, New York, Wisconsin, and Illinois — asserting exclusive federal jurisdiction. Meanwhile, Congress is weighing the Prediction Markets Are Gambling Act, a bipartisan Senate bill sponsored by Senators John Curtis of Utah, Adam Schiff of California, and Catherine Cortez Masto of Nevada, which would prohibit event contracts tied to sporting events at the federal level.

For bettors curious about prediction market legality in their state, the legal picture continues to shift rapidly as courts weigh competing federal and state authority. Those who have been using Kalshi for sports-related contracts in New Mexico should be aware that the state has taken an active enforcement posture and that continued access to the platform may be interrupted. Anyone still exploring Kalshi’s platform should monitor court developments closely over the coming weeks.

What Happens Next

The New Mexico case will be decided in state court in Santa Fe unless it is removed to federal court, a move that Kalshi has pursued in other state-level suits. The company has not yet issued a public response to the Torrez filing. Given the pace of litigation across the country and multiple June deadlines in related federal cases, a clearer picture of which regulatory framework governs prediction markets — federal or state — could emerge before the end of summer 2026.