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If we’re being honest, legal sports betting is in a bit of a standstill. Gone are the days when everyone is bullish on unlimited growth in the industry.
At this point, the legalized industry is nearing 10 years and most states who wanted it, have already gone through with it. Only 11 states remain without any legal sports betting capacity.
New Mexico is one of the 39 states with a legalized marketplace… albeit a restricted one. So there are no sports betting apps in the state, as per the current laws, all sports betting in New Mexico has to be done at tribal casinos. In-person only.
This has effectively put a lid on the industry. The tribes don’t have to report gambling revenues, but paper napkin math tells us it’s not a very substantial industry, at least compared to nearby states like Arizona betting or Nevada betting.
In both those states, bettors can gamble from anywhere or everywhere — at home, in the car, at work, at the bar, you get the point. New Mexico forcing bettors to drive to a physical casino to get action, that simply creates too much friction and effectively handcuffs the industry.
But if this lawmaker has any say, that won’t last for long. A politician in New Mexico is advocating for mobile sports betting in the state. Keep reading, and we’ll tell you what’s happening.
Lawmaker Calls For Modernization
Republican Rep. John Block is the man to know here. It’s he who is asking New Mexico’s tribes already in the gambling business to consider expanding their sports offering to mobile.
And make no mistake, any sports betting expansion has to be tribal-led. See, the state has a compact with local Native American tribes. Those compacts not only keep commercial casinos out of the state, but it also spells out exactly what forms of gambling are permitted. Right now, the language only calls for in-person betting, which goes for both sports and casino.
Block wants to change that, and his argument is pretty straightforward: New Mexicans are already betting online whether the state likes it or not. But since it’s not regulated, the state ends up missing out on the tax revenue.
“It would be really nice, at least, to get some more revenue,” Block said during a recent Indian Affairs Committee meeting.
He estimated New Mexico is missing out on tens of millions of dollars because bettors are opting to use offshore sportsbooks or prediction markets instead. And ironically, the latter is probably a big reason Block wants to expand sports betting in the first place. More about that in the next section.
Prediction Markets Threw New Mexico For A Loop
The pressure to legalize statewide started from elsewhere: the rise of prediction markets. That’s right, the likes of Kalshi and Polymarket have caught the entire industry off guard.
Prediction markets are completely accessible in New Mexico (even to those 18 years old, despite the gambling age being 21 in the state). At these platforms, bettors in the state can throw money on sports outcomes like who’ll win a game or who ends up with the most points scored.
New Mexico regulators don’t like that because it essentially sidesteps its state rule. Prediction markets can, for now, legally do that since they are federally approved. This led to the state of New Mexico suing prediction market operator Kalshi earlier this year. According to the attorney general, sports wagering is only supposed to occur through tribal gaming compacts or other state-authorized gaming operators. Kalshi, the state argues, fits neither category.
Like it has elsewhere that it’s caught a lawsuit, Kalshi argues its “sports event contracts” are federally regulated financial products rather than gambling. The Commodity Futures Trading Commission has even stepped into the dispute, filing its own lawsuit against New Mexico and arguing federal law — not state gambling law — governs Kalshi’s business.
We’ve seen this exact fight play out in Nevada, New Jersey, Maryland, California and several other states over the past year. So far, none have had any success in permanently keeping prediction markets out of their state. But hey, New Mexico is trying regardless!
The Tribes Hold The Cards
Block may want to expand betting, but do the tribes? Ultimately, this entire decision comes down to them.
That’s what makes New Mexico unique among states without mobile betting. In this fine state, this isn’t simply a matter of passing another bill through the usual legislative process. No, no, instead, tribal gaming compacts would have to be renegotiated, meaning any expansion has to work for both sides.
I know what you’re thinking, “but this sounds like a slam dunk for the tribes. Why would they not be on board?”
Well, for one, it’s because it’s expensive to build out a mobile sports betting product. For the smaller tribes that are less well-off, that might be too much of a cost to incur. And if they don’t have a mobile product, then they’d lose market share to the tribe that does. Suddenly, one or two big tribes take everyone else’s sports betting business, and that’s not a net benefit to every tribe.
So yeah, things can get complicated. That’s why we’d hold our horses when it comes to expansion talks. That’s all it is at this point — talks. The hard part is coming to an agreement on how to actually do this so it lifts all boats, not just a few.
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