The CFTC sues the state of New Mexico, continuing its battle for control of the sports prediction market.

According to Odaily Odaily, the U.S. CFTC has filed a lawsuit in the U.S. District Court for the District of New Mexico against Governor Michelle Lujan Grisham, Attorney General Raúl Torrez, and other officials, attempting to block the state from applying gambling regulations to prediction market platforms. Previously, New Mexico sued Kalshi, accusing it of offering sports betting to state residents without a license and allowing users under the state's legal gambling age of 21 to participate. The New Mexico Attorney General stated that legal gambling in the state can only operate under tribal-state gambling agreements or within a strict state regulatory framework. The CFTC argues that platforms like Kalshi offer federally regulated derivatives contracts, not gambling products under state law. CFTC Chairman Michael Selig stated that New Mexico is attempting to impose its state gambling laws on federal derivatives exchanges subject to the exclusive jurisdiction of the CFTC. In recent months, the CFTC has filed lawsuits against several states, including Wisconsin, Illinois, Arizona, Connecticut, and New York, to establish its regulatory authority over the sports prediction market. This week, the agency also proposed broader prediction market rules that, overall, would still allow sports-related contracts to exist, indicating an escalating conflict between federal and state governments over the boundaries between prediction markets and sports betting.