New Mexico Attorney General Raúl Torrez filed a lawsuit against Kalshi, a U.S.-based prediction market platform. The court filing accuses the company of circumventing state gambling laws by offering unregulated sports betting disguised as financial trading.
The state prosecutor filed the lawsuit in New Mexico’s First Judicial District Court, arguing that Kalshi’s activities constitute a “public nuisance.” It alleges the platform is driving compulsive gambling behavior in a state already facing an excessive share of gambling addiction. According to the filing, New Mexico’s rate of gambling problems is nearly four times the national average.
Torrez said Kalshi has operated beyond the scope of state gaming regulations. The framework, he explained, governs where and how gambling is allowed, subject to negotiated terms and licensing rules. “Kalshi has ignored that framework entirely while offering online sports betting within the state,” Torrez said in a statement. “We are filing this lawsuit to protect the integrity of our laws, our regulatory system, and most importantly, consumers.”
Kalshi’s “event contracts,” which allow users to wager on outcomes such as sports results, are illegal forms of gambling under a 1953 state law, the state prosecutor alleges. The law generally prohibits most forms of wagering except those explicitly authorized under New Mexico’s Gaming Control Act.
The lawsuit, which was filed on Thursday, also claims Kalshi’s platform is actively offering bets linked to real-time sports events, including wagers on NBA games. That kind of activities, prosecutors claim, function inseparably from traditional sports betting.
The legal action adds to growing pressure the company is facing. Three New Mexico pueblos and one tribe filed a separate federal lawsuit last month. They accused Kalshi over intrusion on tribal sovereignty by enabling betting tied to events on Indigenous land. The case remains pending in federal court. It follows a favorable ruling for a Wisconsin tribe in a similar dispute involving the platform.
State officials say the tribal and state cases are separate but complementary. “We respect and support the separate action filed by tribal governments in May to protect their sovereign interests,” said Lauren Rodriguez, chief of staff at the New Mexico Department of Justice. “These efforts are separate but complementary tracks that together defend both the State’s interests and the integrity of tribal gaming in New Mexico.”