CFTC Sues New Mexico to Block State Gambling Rules for Prediction Markets

Odaily Planet Daily reports that the U.S. Commodity Futures Trading Commission (CFTC) has sued New Mexico Governor Michelle Lujan Grisham, Attorney General Raúl Torrez, and other officials in the U.S. District Court for New Mexico, aiming to stop the state from applying its gambling regulations to prediction market platforms. The dispute follows New Mexico's lawsuit against Kalshi, in which the state alleged the platform offered sports betting to New Mexico residents without 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 under tribal-state gaming compacts or within a tightly regulated state framework. The CFTC contends that platforms such as Kalshi list federally regulated derivatives contracts, not gambling products under state law. CFTC Chair Michael Selig said New Mexico is trying to extend state gambling laws to federal derivatives exchanges that fall under the CFTC's exclusive jurisdiction. In recent months, the CFTC has filed similar suits against Wisconsin, Illinois, Arizona, Connecticut, and New York as it seeks to reaffirm its oversight of sports-related prediction markets. The agency also proposed broader rules for prediction markets this week, which would generally continue to allow sports-related contracts.