CFTC Sues New Mexico to Block State Gambling Rules From Applying to Sports Prediction Markets

The U.S. Commodity Futures Trading Commission (CFTC) has sued New Mexico Governor Michelle Lujan Grisham, Attorney General Raúl Torrez and other state officials in the U.S. District Court for New Mexico, seeking to stop the state from applying its gambling regulations to prediction market platforms. New Mexico previously filed suit against Kalshi, alleging the platform offered sports betting to state residents without proper authorization and allowed participation by users below the state's legal gambling age of 21. The attorney general's office has argued that lawful gambling in New Mexico may operate only through tribal-state gaming compacts or within a tightly regulated state framework. The CFTC says Kalshi and similar venues offer federally regulated derivatives contracts, not gambling products governed by state law. CFTC Chair Michael Selig said New Mexico is attempting to apply state gambling statutes to federal derivatives exchanges that fall under the CFTC's exclusive jurisdiction. In recent months, the CFTC has brought similar actions against Wisconsin, Illinois, Arizona, Connecticut and New York to assert oversight of sports prediction markets. The agency also released proposed rules this week that would broadly allow sports-related contracts, underscoring a widening federal-state clash over where prediction markets end and sports betting begins.