The Commodity Futures Trading Commission plans to sue New Mexico to prevent it from blocking sports-event contracts in the state, Front Office Sports has learned. The suit is expected to be filed Friday afternoon in federal court, according to FOS sources.
It comes as a response to New Mexico suing Kalshi in state court on June 4. The federal regulator is asking the court to rule that it has exclusive jurisdiction to regulate sports-event contracts, and also seeks a permanent injunction that would bar New Mexico from enforcing state gambling laws against prediction-market platforms that fall under the CFTC’s purview.
New Mexico is the eighth state to be sued by the CFTC since April 2, when the regulator launched lawsuits against Illinois, Arizona, and Connecticut. Since then, it has also sued New York, Rhode Island, Wisconsin, and Minnesota.
The suit continues a trend U.S. gaming attorney Dan Wallach, a fierce critic of prediction markets, pointed out last month: the CFTC has only sued states with Democratic governors and attorneys general.
The lawsuit comes two days after the CFTC issued a 267-page notice of proposed rulemaking that would update regulations around prediction markets, but which experts say is unlikely to change anyone’s mind with regard to how they feel about the industry. The notice does not mean any new rules have been put in place yet. It was published in the Federal Register Friday, meaning a 45-day period now begins during which the public can offer comments for the CFTC to consider.
