New Mexico is the next state in the Commodity Futures Trading Commission's crosshairs after the state sued predictions market Kalshi for illegally offering sports betting to its residents.
On Friday, the CFTC filed a lawsuit in the U.S. District Court for the District of New Mexico against Gov. Michelle Lujan Grisham, Attorney General Raúl Torrez and other officials to block their efforts to apply gaming laws. This marks the CFTC's latest move to assert its jurisdiction over prediction markets, specifically sports betting, as the fight continues over whether states or the federal government has jurisdiction over those contracts.
Last week, New Mexico charged Kalshi and said the platform had not obtained a license and also allowed people to participate before its legal age, set at 21 years old. In a statement, Attorney General Torrez said that "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."
Over the past few months, the CFTC has sued several states to assert its jurisdiction over sports betting, including Wisconsin, Illinois, Arizona, Connecticut and New York. Under the Trump administration, CFTC Chair Michael Selig has sought to assert the agency's oversight over prediction markets. This past week, the agency also proposed broad rulemaking that would still allow overall support for sports betting. Meanwhile, states have asserted that they have jurisdiction over sports betting.
"New Mexico is the latest state seeking to nullify black letter law and decades of judicial precedent by imposing state gaming laws on federally regulated derivatives exchanges subject to the CFTC’s exclusive jurisdiction," Selig said in a statement.
In the latest complaint, the CFTC again argued that the Commodity Exchange Act, the primary federal law for trading futures and options, gives the agency "exclusive jurisdiction."
"The United States and the Commission are injured by New Mexico’s enforcement efforts," the agency said. "The federal government has a statutorily protected interest in maintaining exclusive jurisdiction over transactions involving swaps on DCMs [designated contract markets], as well as in administering the CEA’s comprehensive regulatory structure."
Gov. Lujan Grisham's office did not immediately respond to a request for comment.
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