Polymarket has taken legal action against the state of New Mexico, filing a lawsuit in federal court aimed at blocking state authorities from enforcing gambling regulations on its platform. The lawsuit names Attorney General Raul Torrez and six members of the New Mexico State Gaming Control Board as defendants. Polymarket's claim is that prediction markets should be governed solely by the U.S. Commodity Futures Trading Commission (CFTC), thereby exempting them from individual state laws.
The company is seeking a court ruling that declares state gambling laws do not apply to its operations, arguing that such regulations would undermine market liquidity, strain banking relationships, and erode user trust in CFTC-regulated markets. This legal move comes shortly after New Mexico initiated proceedings against Kalshi, which the state accused of illegally offering contracts on sports betting.
Before filing the lawsuit, Polymarket had submitted two requests to delay enforcement actions from New Mexico due to the situation with Kalshi, both of which were denied. The company claims that New Mexico's actions are an effort to dismantle federally sanctioned prediction markets, in direct opposition to what it sees as a clear federal regulatory framework governed by the CFTC.
