New Mexico Sports Betting Providers Want Answers

Online platforms that allow customers to put money on the outcome of sporting events have officially arrived in the Land of Enchantment. And New Mexico sports betting operators want the state to do something about it.

If you are at all familiar with the sports wagering space, you can already guess what these online platforms in question are: prediction markets. These two words have become polarizing throughout the industry, and they are now being mentioned ad nauseam. For good reason, too.

As a brief overview, prediction markets allow “trades” on yes-or-no outcomes to sporting events. “Will the University of New Mexico football team win against Michigan?” is one example of these transactions. Users receive payouts if they take the correct side. The size of those payouts is determined by the amount of action on a given “trade.” Think of it as a stock market for sporting events.

Companies like Kalshi and Polymarket have started offering these options in pretty much every state. That includes the Land of Enchantment. Naturally, it is not sitting well with tribal operators. The latter is granted gaming exclusivity as part of legalized sports betting in New Mexico. This means online sportsbooks such as FanDuel, DraftKings, Caesars and others are not permitted to operate inside the market. Instead, New Mexico sports betting transactions must be processed on tribal property.

Retail sportsbooks in the state see Kalshi and Polymarket as illegal threats to their business model. Users are able to process their “trades” with an app rather than having to appear anywhere on-site. This offers a more convenient alternative, for many, to visiting brick-and-mortar New Mexico sportsbooks.

Tribes across the country have started demanding action be taken against the prediction markets. New Mexico isn’t just among them. Their tribes have been among the most outspoken about it.

New Mexico Sports Betting Providers Want Prediction Markets Out of the State

The staunchest stance we have seen taken against prediction markets in New Mexico remains the sentiments conveyed by Mescalero Apache Reservation Vice President Duane Duffy. Reporting for Source New Mexico, Patrick Lohmann writes the following on the matter:

“Duffy told a panel of state lawmakers this week that platforms like Kalshi allow customers to do online sports betting under the guise of commodity futures trading. The companies are ‘wiggling’ their way into New Mexico, a state where online sports betting is illegal, he said.

"‘That is a threat to the gaming market here in the state, and a clear violation of the state tribal gaming compacts,’ Duffy told members of the interim Economic & Rural Development & Policy Committee on Monday at the tribe’s Inn of the Mountain Gods, which houses its casino. ‘And so that is something that we are going to have to work together on [to] address.’ He said he and other tribes intend to approach lawmakers ahead of the 30-day legislative session in January to see whether there’s a legislative way to crack down on the companies. He also intends to seek help from the New Mexico Attorney General, he said.”

New Mexico’s Attorney General office has since confirmed that it received written statements from tribes in the state. However, beyond offering a vanilla “We’re looking into it” type of response, it is not clear where the state has landed.

This is a little surprising. The 30-day legislative session has already adjourned. Not only haven’t we heard a whisper of action being taken against prediction markets, but we didn’t hear anything about the usual debate over online sports betting in the United States.

We Should Expect New Mexico to Take Action, but to What End?

Retail sports betting in New Mexico launched during October 2018. Since then, the state has continued to resist adding the online element. They believe it’s the best way to preserve the tribal gaming compact. Allowing corporate sportsbooks into the market would create all sorts of market-share challenges for tribes that have neither the same reach nor resources.

Given the state’s commitment to protecting tribal gaming exclusivity, we would have expected a more forceful show of support for New Mexico sports betting operators. And hey, perhaps the Attorney General’s office has done more behind the scenes than we know about. Sure, you would think that they’d publicize it. But that’s a dicey issue by itself.

See, while it is understandable that tribes take exception to prediction-market practices, states can only provide so much resistance. Donald Trump’s presidential administration has already signaled its content to let prediction markets be regulated by the Federal Trade Commission. So even when states take action, it has not resulted in the exile of companies like Kalshi and Polymarket.

On the contrary, prediction-market operators have been given the “okay” to continue providing surfaces while various legal motions play out. This does not bode well for New Mexico sports betting operators, at least not in the interim.

Heck, this might be a long-term problem as well. We are already seeing online sportsbooks like DraftKings and FanDuel launch their own prediction markets. This suggests they are here to stay. At the very least, it does not seem like operators are worried about getting shut down anytime soon.

Time will tell whether that changes. The status quo could remain intact through Trump’s four-year term. It could even endure beyond that. We truly have no idea. And for tribal sports betting operators like those in New Mexico, the lack of an answer, one way or the other, is a big problem.

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