CFTC Sues New Mexico — Eighth State in the Federal Preemption Fight, and the First Filed After the Proposed Rule Dropped
The CFTC sued New Mexico on June 12, 2026 to block the state from enforcing its gambling laws against prediction markets, days after AG Raúl Torrez sued Kalshi for offering unlicensed online sports betting. New Mexico is the eighth state the agency has sued. The complaint is the first to land after the CFTC's own proposed rule was released this week — a rule that explicitly supports most sports-related event contracts.
The Commodity Futures Trading Commission sued New Mexico on Friday, June 12, 2026, asking a federal court to stop state officials from enforcing local gambling laws against federally regulated prediction markets. The suit answers a complaint filed days earlier by New Mexico Attorney General Raúl Torrez, who alleges Kalshi is illegally offering online sports betting in the state through the trading of its sports event contracts. With this filing the CFTC has now sued eight states — joining Arizona, Minnesota, Wisconsin, New York, Connecticut, Illinois, and Rhode Island — in a coordinated federal campaign to defend what it calls exclusive jurisdiction over commodity derivatives.
Chairman Michael Selig's language has hardened with each successive filing. "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," he said. The complaint itself leans on the wins already banked: "New Mexico is not the first State that has attempted to invade the Commission's exclusive jurisdiction over swaps. Already, several federal courts have swiftly responded by issuing temporary restraining orders and preliminary injunctions barring the States from enforcing their gambling laws against CFTC-regulated exchanges that offer sports-related event contracts." That is a direct reference to the Arizona preliminary injunction from Judge Liburdi on May 5 — the template every subsequent CFTC filing now cites as persuasive authority.
New Mexico's legal posture has a specific local wrinkle that makes it more than a copy of the other seven cases. The state permits sports betting only at brick-and-mortar tribal casinos operating under tribal-state gaming compacts; there is no statewide mobile sports-betting framework at all. Torrez framed the case around that structure: "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 has ignored that framework entirely while offering online sports betting within the state." The tribal-compact angle introduces sovereignty and exclusivity interests that the other state cases do not feature, and could draw tribal gaming operators into the fight as interested parties.
The timing against the CFTC's own rulemaking is the part worth watching. The agency released its proposed prediction-market rules this week — the same rules that had been under White House OMB review since late May — and the proposal signals the CFTC is supportive of most sports-related event contracts. That matters for New Mexico and every other pending case: the agency is no longer arguing pure statutory preemption in a regulatory vacuum, it is arguing preemption backed by an articulated federal regime that expressly contemplates and permits the very sports contracts states are trying to ban. Prediction-market operators have won nearly every one of these fights so far, with Nevada the lone exception (legal losses there forced shutdowns). New Mexico becomes the eighth data point in a campaign that, at the trial-court level, is running heavily in the federal government's favor. Our litigation scoreboard tracks all eight cases, the courts, and the latest development in each.
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