New Mexico Suits Kalshi Over Alleged Illegal Sports Betting, Joining Tribes in State Court Fight

New Mexico has become the latest state to target Kalshi, with the New Mexico Department of Justice filing a lawsuit that says the prediction market is offering online sports betting without a gaming license. For PSPs and partners, the point is not the rhetoric; it is that state regulators are now testing whether event contracts can be treated as gambling when they look and function like sportsbook bets.

1. The lawsuit says Kalshi is allowing people to place sports wagers in New Mexico in violation of state law. Attorney General Raúl Torrez argued that the company is offering online sports betting in the state and that it has “ignored” New Mexico’s gaming framework, which he said is built around tribal-state compacts or strict state regulation.
2. New Mexico’s case follows a separate action brought in May by four tribes: the Sandia, Isleta and Pojoaque Pueblos and the Mescalero Apache Tribe. Their complaint focused on Kalshi’s availability to people aged 18 and over and on users placing bets on tribal land through the app, which they say affects tribal sovereignty and sports gambling rights.
3. Torrez said New Mexico’s system is meant to protect consumers, ensure accountability and respect tribal sovereignty. He also said the lawsuit is intended to protect the integrity of state laws and the existing regulatory system, as well as consumer safety.
4. Kalshi has rejected the idea that its products are gambling and says state laws do not apply to it. The company also joined the National Council on Problem Gambling to strengthen consumer protection measures, while recent filings to the US Patent and Trademark Office removed mentions of gambling from its IP.
5. The Commodity Futures Trading Commission (CFTC) has pushed back on state actions against prediction market platforms, saying such cases are an attempt to preempt its exclusive authority over the sector. Torrez disagrees, and New Mexico is now one of several states involved in that broader fight, alongside New York, Massachusetts, Kentucky and Illinois.

One detail that matters for operators: New Mexico says the minimum age for legal gambling is 21, while Kalshi sets its minimum admittance age at 18. That kind of mismatch is exactly the sort of thing state attorneys general and tribal plaintiffs seize on when they want to reframe “event contracts” as plain old betting.