US CFTC sues New Mexico for continued competition to regulate the sports prediction market

On June 13, the U.S. CFTC filed a lawsuit in the Federal District Court of New Mexico against Governor Michelle Lujan Grisham, Attorney General Raúl Torrez and other officials in an attempt to prevent the state from applying gambling regulations to predictive market platforms. Previously, New Mexico sued Kalshi, accusing it of providing sports betting to state residents without a license and allowing users who had not reached the state's legal gaming age of 21 to participate. New Mexico's attorney general said legal gambling in the state can only operate under tribal and state gaming agreements or strict state regulatory frameworks. The CFTC believes that platforms such as Kalshi offer federally regulated derivatives contracts rather than gaming products under state law. CFTC Chairman Michael Selig said New Mexico is trying to impose state gaming laws on federal derivatives exchanges that are subject to exclusive jurisdiction of the CFTC. In the past few months, the CFTC has sued multiple states including Wisconsin, Illinois, Arizona, Connecticut and New York to establish its regulatory authority over the sports prediction market. The agency also proposed broader forecasting market rules this week that would still allow sports-related contracts overall, signaling an escalating conflict between federal and state governments over the forecasting market and sports betting boundaries.