Kalshi Faces State Lawsuits and Possible Supreme Court Review

New Mexico Attorney General Raúl Torrez filed a lawsuit accusing prediction‑market platform Kalshi of offering illegal sports bets that sidestep state gambling laws. The suit adds New Mexico to nearly a dozen U.S. states that have taken legal action against Kalshi.

Kalshi is also confronting enforcement actions in several other states: Arizona filed criminal charges, Nevada issued a restraining order, Massachusetts granted an injunction against sports‑related contracts, and New Jersey has been involved in ongoing appeals. The core dispute centers on whether Kalshi’s contracts are regulated financial derivatives under the CFTC or gambling products subject to state statutes.

The divergent rulings have raised the prospect of a U.S. Supreme Court review, potentially as early as the October 2026 term. Meanwhile, Congress introduced the bipartisan Prediction Markets Are Gambling Act, which would reclassify such contracts as illegal gambling. In response, Kalshi pledged a $2 million investment in the National Council on Problem Gambling.