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New Mexico has become the latest US state to pursue legal action against leading prediction‑market operator Kalshi, accusing the company of running an unlicensed online sportsbook inside the state.
The lawsuit, filed by Attorney General Raúl Torrez, is similar to many already in court around the country and argues that Kalshi has built a platform that “functions as a sportsbook” while ignoring New Mexico’s long‑standing gaming laws and the regulatory system that governs legal gambling.
The Attorney General framed the case as a direct challenge to Kalshi’s attempt to bypass the state’s rules. “New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability, and respects tribal sovereignty,” Torrez said.
He added that lawful gaming in the state only happens under tribal‑state compacts or strict state oversight, and that “Kalshi has ignored that framework entirely while offering online sports betting within the state.”
AG seeking injunction to stop Kalshi’s sports markets
According to the complaint, Kalshi marketed itself as “The First Nationwide Legal Sports Betting Platform” and claimed that sports betting was legal “in all 50 states on Kalshi.”
The filing says the company acted like a traditional sportsbook by accepting and holding customer funds, settling bets, and taking a cut of each wager. When no opposing bettor existed, Kalshi allegedly stepped in through a subsidiary to place the counter‑bet itself, ensuring every wager had two sides.
The lawsuit argues that this setup mirrors how sportsbooks operate, regardless of Kalshi’s rebranding of bets as “event contracts.” The state says these contracts let users wager on outcomes such as who will win an NBA game, how many goals a player will score at the World Cup, or other sports‑related results.
The complaint also notes that Kalshi expanded its offerings to include moneyline bets, point spreads, over/unders, player props, and parlays, all standard sportsbook products.
New Mexico claims Kalshi never applied for a gaming operator’s license or a manufacturer’s license, both required under the Gaming Control Act. By avoiding the licensing process, the company also bypassed obligations tied to compulsive‑gambling prevention, which the state requires from all legal operators.
The complaint seeks an injunction to stop Kalshi from offering sports‑related wagering in New Mexico and to halt what the state calls unlawful and harmful operations.
Torrez said the goal is to protect consumers and uphold the integrity of New Mexico’s gaming laws, stressing that “we are filing this lawsuit to protect the integrity of our laws, our regulatory system, and most importantly, consumers.”
New Mexico joins New York, Massachusetts, Rhode Island, Ohio, Arizona, Utah, Nevada, Washington, and Tennessee among states to have taken Kalshi and other prediction market operators to court this year.
