New Mexico lawmaker pushes for rethink of gaming compact to allow online sports betting

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The Backstory

Compact politics return to the center

New Mexico’s debate over online sports betting is rooted in a compact system that has long made tribes and pueblos the central operators of legal gambling in the state. Sports wagering is permitted, but only in person at tribal casinos. That structure has protected tribal exclusivity while allowing the state to receive a share of casino revenue, a balance that has become harder to maintain as betting moves online and national operators look for access to markets still closed to mobile sportsbooks.

Rep. John Block’s call for tribes and pueblos to revisit the gaming compact reflects growing frustration among some lawmakers who see untaxed online betting as lost public money. New Mexico Gaming Control Board figures cited in the debate show $230 million in casino revenue in the first quarter, with $22 million going to the state general fund. Supporters of an online framework argue mobile sports betting could add tens of millions more, particularly if residents are already using offshore sites, out-of-state accounts or federally regulated prediction platforms.

Tribal representatives have shown little interest in reopening a compact that runs until 2037. For tribes, gambling is not simply a commercial activity but a revenue base for education, jobs, health services and local government functions. Any expansion into online betting would require not only economic negotiations but careful treatment of sovereignty, exclusivity, geolocation and revenue sharing.

Prediction markets changed the pressure point

The immediate pressure on New Mexico’s compact model has come less from traditional sportsbooks than from prediction markets. Platforms such as Kalshi have offered sports event contracts, allowing users to trade on outcomes that resemble sports wagers but are framed as federally regulated financial products. That distinction is now at the core of a national fight over whether sports contracts belong under commodities law or state and tribal gambling rules.

New Mexico’s tribes moved first. In May, the Mescalero Apache Tribe and the Pueblos of Isleta, Pojoaque and Sandia sued Kalshi, alleging the company was illegally offering sports betting on tribal lands. The complaint argued that sports event contracts violate the Indian Gaming Regulatory Act and existing tribal-state compacts. Tribal leaders also said Kalshi allowed participation by users 18 and older, while New Mexico’s casino gambling rules require customers to be at least 21.

The tribes also raised a practical enforcement concern: geofencing. If a prediction market can be accessed from tribal land without tribal authorization, tribal governments say the platform is not merely competing with their casinos but operating inside jurisdictions where gaming rights are reserved by federal law and compact. That claim gives the dispute broader stakes than a typical market-access battle between a state and an online operator.

The attorney general sharpened the legal front

Attorney General Raúl Torrez later escalated the state’s response by filing a separate suit, alleging Kalshi offered illegal online sports betting in New Mexico without approval from the New Mexico Gaming Control Board. The state’s complaint echoed tribal concerns about age limits, consumer protections and regulatory oversight, asserting that lawful gambling is limited to tribal compact operations and entities regulated by the state.

The attorney general’s intervention altered the politics for lawmakers. Before the lawsuits, the online betting debate could be cast largely as a revenue question: whether New Mexico should legalize mobile wagering and collect taxes rather than leave demand to unregulated channels. After the Kalshi cases, the question became more complicated. If prediction markets are permitted to offer sports contracts nationwide under federal commodities rules, New Mexico’s choice may be less about whether online wagering exists and more about who controls it.

That helps explain why compact renegotiation has resurfaced. A legal mobile sports betting system could give tribes a path to compete online while preserving their central role in gaming. But it could also require tribes to accept new regulatory obligations, revenue formulas and potentially outside technology partners. For the state, any deal would have to avoid undermining tribal exclusivity while showing lawmakers that New Mexico is not leaving money on the table.

Tribes warn of a backdoor around exclusivity

The Mescalero Apache Tribe has been among the most vocal opponents of prediction-market sports contracts. At a legislative committee meeting at Inn of the Mountain Gods casino, Vice President Duane Duffy urged state officials to crack down on platforms he said were using a commodities label as a “backdoor” into sports betting. The tribe’s message, detailed in an earlier report on its push for a New Mexico online betting crackdown, was that unregulated platforms threaten compact revenue and the services it funds.

That position places tribes in a difficult strategic posture. They oppose unauthorized online sports wagering but also face questions from legislators about whether compact restrictions are pushing consumers toward those very platforms. The more residents encounter sports contracts through prediction markets, the stronger the argument becomes for a state-sanctioned online alternative. Yet tribes may view that logic as rewarding a market disruption they believe is unlawful.

The compact’s long runway also matters. With expiration not until 2037, tribes have little procedural reason to renegotiate now unless legal, commercial or political pressure makes the existing structure less valuable. Prediction markets may provide that pressure by testing the boundaries of exclusivity before any traditional sportsbook receives approval to operate statewide.

Washington may determine the state’s leverage

The federal backdrop is shifting quickly. The Commodity Futures Trading Commission has proposed rules that would allow certain sports-related event contracts, including markets tied to game winners, final scores, tournament progress and season performance. The proposal would bar in-game contracts, injury-related contracts, pre-collegiate sports and casino-style luck games. The agency’s approach, described in a report on the CFTC’s proposed sports event contract rules, suggests federal regulators may be willing to accommodate parts of the prediction-market business model.

That prospect complicates New Mexico’s enforcement strategy. If the CFTC treats sports contracts as permissible derivatives, Kalshi and similar companies may argue that federal law preempts state gambling restrictions. States and tribes counter that Congress did not create the CFTC to act as a national gaming regulator and that event contracts tied to sports outcomes function like bets regardless of their trading mechanics.

The proposed federal rules also could weaken New Mexico’s bargaining position with tribes. If sports contracts remain available through federally regulated markets, the state may have less practical ability to keep online sports wagering out of the market. Conversely, uncertainty at the federal level could strengthen the case for a negotiated compact amendment that gives residents a legal in-state option and creates a clearer enforcement target against unlicensed operators.

Integrity concerns add another constraint

The debate is unfolding as sports leagues, regulators and universities face renewed scrutiny over gambling integrity. The NCAA recently reversed a decision that would have allowed college athletes and athletic department staff to bet on professional sports, after member schools pushed back amid a series of gambling scandals. The reversal, covered in a report on the NCAA’s decision to rescind pro sports betting access, underscored how quickly legal expansion can run into concerns over athlete conduct, insider information and public trust.

Those concerns are relevant to New Mexico even though its immediate dispute is about tribal compacts and prediction markets. Any online sports betting framework would need safeguards on age verification, geolocation, responsible gambling, suspicious wagering reports and data sharing. Prediction markets raise additional questions because they may attract users who see themselves as traders rather than gamblers, potentially blurring consumer-protection expectations.

For now, New Mexico’s policy choices are constrained by three forces moving at once: tribal sovereignty, federal prediction-market regulation and legislative interest in new revenue. Block’s request for a compact rethink signals that lawmakers may not be willing to wait until 2037 to revisit the system. Whether tribes agree may depend on whether courts and federal regulators leave the current compact model intact or force the state to design a new one around a market that has already moved online.