The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against the state of New Mexico, including Governor Michelle Lujan Grisham and Attorney General Raúl Torrez, in the U.S. District Court for the District of New Mexico. The federal regulator aims to block the state's efforts to enforce local gaming laws against the prediction market platform Kalshi, which New Mexico previously sued for allegedly offering illegal sports betting to its residents without a license and allowing participation before the legal age of 21.
This legal action is the latest in the CFTC's aggressive push under Chair Michael Selig, appointed during the Trump administration, to assert exclusive jurisdiction over prediction markets, particularly those involving sports betting. The agency argues that the Commodity Exchange Act (CEA) grants it sole authority over federally regulated derivatives exchanges, preempting state gaming laws. Similar lawsuits have been filed against other states, including Wisconsin, Illinois, Arizona, Connecticut, and New York, as the commission seeks to establish a unified federal framework.
In a statement, Selig criticized New Mexico's attempt to “nullify black letter law and decades of judicial precedent,” emphasizing that the CFTC’s oversight is necessary to protect the integrity of these markets. The dispute could have far-reaching implications for the crypto and blockchain ecosystem, as it may set a precedent for whether prediction market platforms—including those dealing with crypto assets—must navigate a patchwork of state regulations or adhere to centralized federal control.
