New Mexico Says "Bet" — CFTC Says "Hold My Exclusive Jurisdiction" 🤼

The U.S. Commodity Futures Trading Commission has countersued New Mexico in federal court, escalating a legal fight over the state's attempt to block sports-related prediction contracts offered by Kalshi. The CFTC filed its complaint Friday, arguing that New Mexico is improperly applying state gambling laws to derivatives exchanges that fall under the federal regulator's exclusive authority.

The lawsuit seeks a declaratory judgment affirming the CFTC's jurisdiction over event contracts under the Commodity Exchange Act, along with an injunction barring New Mexico from enforcing state gaming rules against CFTC-registered platforms. The action follows a state court lawsuit filed last week by New Mexico Attorney General Raúl Torrez, which accused Kalshi of running illegal sports betting markets online and attempting to "evade state gaming laws." The state asked the court to prohibit Kalshi from offering sports event contracts to state residents.

CFTC chairman Michael S. Selig said, "New Mexico is the latest state seeking to nullify black letter law and decades of judicial precedent by imposing state gaming laws on federally regulated derivatives exchanges subject to the CFTC's exclusive jurisdiction." Selig added that the regulator "has the expertise and statutory authority to oversee these markets." The dispute centers on whether event contracts on sporting outcomes constitute gaming under New Mexico law or derivatives under federal law, a question Kalshi and the CFTC have pressed in similar fights with other states.