“Importantly, the semantics Kalshi employs to distinguish its event contracts from sports betting do not change the detrimental impact its platform has on the public, with a recent study from the American Gaming Association showing that 85% of Americans believe prediction markets’ sports categories amount to gambling,” the lawsuit alleges.
New Mexico Attorney General Raúl Torrez has filed a lawsuit accusing betting platform Kalshi of actively evading the state’s gaming laws.
According to SourceNM.com, the lawsuit was filed earlier this week in New Mexico’s First Judicial District Court. Torrez claims that Kalshi’s continued operations constitute a “public nuisance” by contributing to compulsive and addictive gambling behaviors.
The attorney general’s office noted that New Mexico’s rate of problematic gambling is already four times higher than the national average.
“New Mexico has a longstanding and carefully balanced system for regulating gaming that protects consumers, ensures accountability, and respects tribal sovereignty,” Torrez said in a press release. “The only lawful gaming in New Mexico operates either under tribal-state gaming compacts, or under strict state regulations to ensure honest gaming free from corruption, and licenses gaming operators only after they explain how they plan to address compulsive gambling.”
“Kalshi,” he said, “has ignored that framework entirely while offering online sports betting within the state. We are filing this lawsuit to protect the integrity of our laws, our regulatory system, and most importantly, consumers.”
Torrez’s office says that Kalshi lets users wager on the outcomes of sport events through so-called “event contracts,” which serve the same function and purpose as traditional sports bets. Kalshi allegedly began offering this type of wager to New Mexico residents without obtaining an appropriate gaming license.
“Importantly, the semantics Kalshi employs to distinguish its event contracts from sports betting do not change the detrimental impact its platform has on the public, with a recent study from the American Gaming Association showing that 85% of Americans believe prediction markets’ sports categories amount to gambling,” the lawsuit alleges.
Kalshi has also allegedly let adults between the ages of 18 and 20 place sports bets despite New Mexico setting a minimum “gaming age” of 21.
“Amid growing concerns about young adults—particularly young men—engaging in harmful behavior related to sports betting, and the lack of in-person age verification for online betting, Kalshi has indicated its willingness to implement stronger age verification tools to make it more difficult for those under the age of 18 to use its platform,” the lawsuit says. “However, Kalshi has made clear it will continue to offer its platform to those between the ages of 18 and 20.”
SourceNM.com reports that a coalition of pueblos and tribes sued Kalshi in federal court in May. These claims accuse Kalshi of allowing sports betting on tribal land, thereby undermining local governments’ ability to raise revenue for schools and other public institutions.
State officials have said they now view Torrez’s lawsuit as a “complementary” action against Kalshi.
“We respect and support the separate action filed by tribal governments in May to protect their sovereign interests,” New Mexico Department of Justice chief of staff Lauren Rodriguez told SourceNM.com in an emailed statement. “And we view these efforts as separate but complementary tracks that together defend both the State’s interests and the integrity of tribal gaming in New Mexico.”
Sources
New Mexico AG Torrez sues Kalshi for allowing allegedly illegal sports betting
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