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ALBUQUERQUE, NM (Gambling911.com) - It is one of the quieter cases involving US states and prediction markets, but the pueblos case there is likely to have important ramifications nonetheless.
In May, the plaintiffs — the Mescalero Apache Tribe, as well as the Pojoaque, Sandia and Isleta Pueblos — alleged in federal court that Kalshi violates tribal gaming compacts and federal law by providing anyone over age 18 access to sports gambling in New Mexico.
Under existing state gaming compacts and federal law, only people aged 21 and over in New Mexico can place bets on sports in person at tribally owned casinos.
New Mexico does not currently offer online sports betting, though Kalshi's product is available to residents of the state, as are offshore sportsbooks and real money online casinos as well as an abundance of sweepstakes casinos and daily fantasy sports sites.
The case attacks Kalshi from a somewhat different direction than Nevada, New Jersey or Michigan. Instead of primarily asking whether state gambling law can regulate Kalshi, it asks whether Kalshi's sports contracts violate federal Indian gaming law and tribal sovereignty when offered to customers physically located on tribal lands.
New Mexico Attorney General Raúl Torrez also sued the company in state court in June, alleging the company is breaking state laws and creating a “public nuisance” by contributing to compulsive and addictive betting in a state that already has nearly four times the national rate of problem gambling.
From The Source:
The Friday filing marks the plaintiffs’ final written arguments seeking a preliminary injunction from U.S. District Court Judge Margaret Strickland. The 19-page argument contends that the plaintiffs meet all the criteria to justify an order forcing Kalshi to immediately stop operating within tribal boundaries.
To avoid a ban, the company is relying on a “rash of red herrings via many material misstatements about this case and the law,” the plaintiffs wrote Friday. “None of that improves Kalshi’s odds.”
Kalshi’s lawyers have countered that the federal Commodities Exchange Act trumps the federal Indian Gaming Regulatory Act, as well as state gaming compacts, and that regulating the platform is under the sole discretion of the Commodities Futures Trading Commission, the federal agency that oversees prediction markets.
In a response in late August, the company also said that a law forcing the app not to operate on tribal lands would “cause significant operational and commercial harm.”
The New Mexico plaintiffs’ filing also cites an Aug. 28 9th U.S. Circuit Court of Appeals ruling in a similar case that upheld a lower court’s decision allowing Nevada regulators to bar Kalshi from offering trades — known as “swaps” — on sporting events.
But Kalshi has had some success of its own in state legal battles.
New Jersey tried to enforce its sports-gambling laws against Kalshi. Kalshi obtained a federal preliminary injunction, preventing the state from doing so.
Then, on April 6, 2026, the Third Circuit Court of Appeals upheld that injunction 2-1.
The majority concluded that Kalshi was likely to establish that its sports event contracts fall within the Commodity Exchange Act's federal regulatory regime and that CFTC jurisdiction preempts New Jersey's gambling laws.
It remains a preliminary-injunction decision, not a final merits judgment.
New Jersey has since filed its Supreme Court petition on September 2, asking SCOTUS to overturn it.
Kalshi also won a preliminary injunction in Tennessee.
Last week's Michigan ruling (on September 1) presented a significant loss for Kalshi,
Ingham County Circuit Court Judge Rosemarie Aquilina ordered Kalshi to continue blocking people located in Michigan from accessing its sports-event contracts.
The injunction is broad. It prohibits Kalshi from offering or facilitating products functionally similar to internet sports betting.
Kalshi has already stopped offering sports-event trades to people physically located in Michigan, although it has not conceded that Michigan has the legal authority to require it.
Robinhood on Tuesday announced it would stop offering sports contracts in the state as well.
- Gilbert Horowitz, Gambling911.com
