Polymarket Sues New Mexico Over Prediction Market Regulations

Polymarket has taken legal action against the state of New Mexico, filing a lawsuit in federal court aimed at preventing state authorities from enforcing gambling regulations against its prediction market platform. The lawsuit names Attorney General Raul Torrez and six members of the New Mexico State Gaming Control Board as defendants. Polymarket contends that prediction markets should be regulated exclusively by the U.S. Commodity Futures Trading Commission (CFTC), arguing that state-level enforcement would hinder liquidity and banking relationships, ultimately damaging user trust in CFTC-regulated environments. This legal dispute follows New Mexico's recent actions against Kalshi, which faces allegations of operating illegally by offering sports betting contracts. Prior to filing the lawsuit, Polymarket requested two delays in enforcement from New Mexico, citing the Kalshi case, but both requests were denied. The company asserts that New Mexico's efforts are aimed at undermining federally authorized prediction markets, which they believe operates under a clear federal regulatory framework managed by the CFTC.