CFTC sues New Mexico over attempt to apply state gaming laws to prediction markets
New Mexico becomes the eighth state to clash with the federal regulator over the regulation of prediction market platforms.
US.- The Commodity Futures Trading Commission (CFTC) has sued New Mexico in federal court, seeking to prevent the state from applying its gaming laws to CFTC-registered prediction market platforms.
Filed on June 12 in the US District Court for the District of New Mexico, the complaint names governor Michelle Lujan Grisham, attorney general Raúl Torrez and members of the New Mexico Gaming Control Board as defendants. The CFTC is seeking a declaratory judgment affirming its exclusive authority over event contracts and a permanent injunction preventing New Mexico from enforcing state gaming laws against federally regulated platforms, with a focus on KalshiEX.
The filing reads: “The CFTC has clear and longstanding exclusive jurisdiction to regulate event contracts and the prediction markets on which they trade under the Commodity Exchange Act, which preempts state laws purporting to regulate designated contract markets.”
The filing follows a June 4 lawsuit by New Mexico against Kalshi and KalshiEX. The lawsuit alleges that the prediction platform is unlawfully offering online sports betting in the state while attempting to evade the state’s licensing and regulatory requirements.
The state argues that the platform allows users to wager on the outcomes of sporting events through event contracts similar to traditional sports bets and offered its product to New Mexico residents without obtaining a gaming licence. The lawsuit also claims that Kalshi has allowed participation by people aged 18 to 20, despite New Mexico’s minimum gaming age of 21.
Michael S. Selig, CFTC chairman, said: “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. As I’ve said repeatedly, the CFTC has the expertise and responsibility to protect its exclusive jurisdiction over commodity derivatives, and that’s exactly what we’ll continue to do.”
New Mexico is the eighth state to clash with the CFTC over prediction market regulation, following actions in Arizona, Connecticut, Illinois, New York, Minnesota, Rhode Island and Wisconsin.
