Polymarket Sues New Mexico Over Prediction Markets
United States (New Mexico).- 2 July 2026 www.zonadeazar.com Polymarket has filed a federal lawsuit against New Mexico Attorney General Raúl Torrez and officials from the New Mexico Gaming Control Board, escalating the legal battle between US states and federally regulated prediction market platforms.
News Details
The lawsuit follows New Mexico’s 4 June 2026 legal action against Kalshi, in which the state argued that federally regulated event contract trading constitutes unlicensed online sports betting.
Polymarket said that action created an immediate threat to its own business in the state. The company argued that it faces a real and imminent risk of enforcement, including civil penalties, potential criminal liability and forced cessation of operations in New Mexico.
Polymarket also claimed it tried to engage with state authorities to avoid unnecessary litigation and requested that any enforcement action be deferred until related cases involving Kalshi or the Commodity Futures Trading Commission (CFTC) were resolved. According to the filing, those requests were rejected by the state Department of Justice.
The company is asking the court for preliminary and permanent injunctions to prevent New Mexico from enforcing its state gambling laws against Polymarket’s prediction market operations.
Industry Context
New Mexico is among more than a dozen states involved in legal disputes with prediction market platforms. The central question is whether event contracts should be regulated exclusively by the CFTC as financial derivatives or whether states may treat them as sports betting products subject to local gambling laws.
In June, the CFTC also sued New Mexico officials in response to the state’s case against Kalshi. Tribal interests in the state have also brought claims against Kalshi, alleging conflicts with tribal gaming compacts and the Indian Gaming Regulatory Act (IGRA).
Statements
In its court filing, Polymarket argued that New Mexico’s actions show an intent to use state law to shut down federally authorised markets despite federal preemption.
The company added that even a meritless state enforcement action could disrupt its federally authorised operations, fragment a national market, reduce liquidity, harm banking and commercial relationships, undermine user trust and harm New Mexico residents.
Next Steps or Impact
The case could become another important precedent in the national dispute over prediction market regulation in the United States. If the court grants the requested injunctions, Polymarket could continue operating in New Mexico without being subject to state gambling laws while the litigation proceeds.
Edited by: @_fonta
