- The Commodity Futures Trading Commission (CFTC) are suing New Mexico after the state issued a lawsuit against Kalshi.
- New Mexico is added to the list of states being sued by the CFTC after attempting to regulate prediction markets, as the commission seeks to reaffirm their exclusive regulatory jurisdiction.
- In other news, the Nevada Gaming Control Board seeks to hold Kalshi in contempt of court after failing to geofence their offerings in Nevada.
ALBUQUERQUE, N.M. – A roundup of recent prediction market news includes dueling lawsuits in New Mexico and Nevada. The Commodity Futures Trading Commission (CFTC) are suing the state of New Mexico and aim to prevent the state from regulating prediction market offerings.
In a release from the CFTC, it states “Today’s lawsuit reaffirms the CFTC’s continued commitment to its ongoing campaign of preserving exclusive jurisdiction over CFTC-registered prediction markets. New Mexico joins a growing list of states purporting to regulate registrants within CFTC’s jurisdiction, following litigation in Arizona, Connecticut, Illinois, New York, Minnesota, Rhode Island, and Wisconsin.”
The lawsuit stems from New Mexico’s state court lawsuit against Kalshi, which seeks to prevent the prediction market operator from offering any sports-related event contracts in the state. While many states continue to attempt to regulate prediction market offerings, the CFTC continue to sue with their claims of exclusive federal regulation.
“The CFTC has clear and longstanding exclusive jurisdiction to regulate event contracts and the prediction markets on which they trade under the Commodity Exchange Act, which preempts state laws purporting to regulate designated contract markets.”
Meanwhile, Nevada is also taking a strong stance against Kalshi. The state’s legal sports betting regulator, the Nevada Gaming Control Board (NGCB), asked a state court to hold Kalshi in contempt.
NGCB Wants Kalshi In Contempt, Fined For Failing To Block Locals
Despite a May court order preventing Kalshi from operating in Nevada, investigators found that they were still able to purchase sports event contracts in the state. The NGCB release makes it clear that Kalshi failed to comply with their geofencing, and now the Board wants “significant” monetary penalties and Kalshi to be held in contempt.
NGCB Chairman Mike Dreitzer said that “The Court has required Kalshi to stop offering covered event contracts in Nevada. We will continue to vigorously enforce Nevada law to safeguard gaming in our state.” State law requires entities that offer sports event contracts to be licensed in the state of Nevada.
