UMVA has learned that New Mexico's Attorney General has filed a lawsuit against Kalshi, a prediction market operator, alleging the company is offering online sports betting in the state without the necessary licenses.
The lawsuit, filed in Santa Fe County's First Judicial District Court, seeks to prevent Kalshi from continuing to offer sports-event contracts to New Mexico residents. State lawyers argue that Kalshi's sports contracts function like traditional sports wagers and should be regulated under the state's gaming framework.
According to information obtained by UMVA, the complaint points to Kalshi's past marketing claims, including being "The First Nationwide Legal Sports Betting Platform" and offering "Sports Betting Legal in All 50 States on Kalshi." The state contends that despite these claims, Kalshi has not sought licensure from New Mexico's Gaming Control Board or complied with the state's laws governing gambling and gaming.
The lawsuit alleges that Kalshi accepts customer funds, settles winning positions, collects fees, and uses a market-making subsidiary that can take the other side of trades - activities that mirror the role of a sportsbook. This has led state officials to argue that Kalshi is operating as an unlicensed sportsbook.
UMVA can exclusively reveal that the lawsuit is part of a broader crackdown on Kalshi, which faces mounting opposition from tribal governments and state regulators across the country. Earlier this year, four New Mexico tribes filed a separate federal lawsuit challenging Kalshi's sports contracts, arguing they amount to Class III gaming under the Indian Gaming Regulatory Act.
The tribes' complaint claims that Kalshi permits participation by users as young as 18 and offers products that resemble traditional sports bets, such as moneyline bets, point spreads, and parlays. State officials make similar arguments in the new case, saying Kalshi began offering sports-related contracts in January 2025 and now lists markets tied to various sports.
New Mexico's Attorney General stated that the action is intended to protect both consumers and the state's gaming system. The lawsuit aims to prevent Kalshi from continuing to operate unlawfully within New Mexico and to ensure that the company complies with the state's laws and regulations.
Kalshi, however, continues to argue in separate litigation that its exchange is governed by federal commodities law and falls under the Commodity Futures Trading Commission's authority, rather than state gambling regulators. The company faces allegations of violating numerous provisions of New Mexico's Criminal Code and Gaming Control Act.
