The state of Massachusetts has filed a formal brief opposing Robinhood's motion for a preliminary injunction. It's the latest salvo in the growing legal dispute over prediction markets and sports-related event contracts.
Key Takeaways
- Massachusetts has opposed Robinhood's motion seeking to block the enforcement of state gambling laws.
- The state argues that federal law does not preempt state authority over gambling and sports-related event contracts.
- The case mirrors other regulatory actions, including those involving Crypto.com and Kalshi.
In a preview of its anticipated legal argument against Kalshi, Massachusetts has filed its brief in opposition to Robinhood's motion for preliminary injunction. Here is its argument against federal preemption: pic.twitter.com/Bebt2iTa5y
— Daniel Wallach (@WALLACHLEGAL) October 11, 2025
Robinhood had asked a judge to block Massachusetts regulators from enforcing state laws that it argues are preempted by federal statutes. The company claims its event-based offerings, which allow users to trade on sports outcomes, fall under federal commodities law rather than state gambling regulations.
Massachusetts rejected that argument, stating that Robinhood's assertion of nationwide legalization of sports betting is unfounded.
The filing described Robinhood's reasoning as "smoke and mirrors," pointing to federal court rulings that support state authority in regulating gambling.
The state also referred to a similar case involving Crypto.com, which was prevented from offering sports bets in Nevada. The brief also mentioned prior precedents holding that states may independently define acceptable forms of gambling, even though Robinhood had suggested such laws had been rescinded since 2010.
Kalshi launches legal challenge in Ohio
Similar to the Massachusetts lawsuit against Robinhood, a showdown has occurred in Ohio with Kalshi. The firm has sued the Ohio Casino Control Commission and the state attorney general, accusing the state of abusing its authority in closing off its business and threatening its business counterparts.
Filed on Oct.7, the lawsuit asserts that the allegedly illegal enforcement harmed the company.
Kalshi argues its event-based markets, including those linked to sports outcomes, fall under the federal oversight of the Commodity Futures Trading Commission (CFTC), not state gambling regulators. The company contends that Ohio's cease-and-desist letter and warnings to licensed sportsbooks effectively barred its access to users and partners.
The filing seeks an injunction before Oct. 20 to prevent further enforcement actions while the case proceeds. Ohio officials, however, maintain that all sports wagering within the state must occur through licensed operators and reject Kalshi's assertion that federal preemption nullifies their authority.
DraftKings penalized for credit card violations in Massachusetts
Elsewhere in Massachusetts, the Massachusetts Gaming Commission (MGC) penalized DraftKings $450,000 in August. The fine was issued after the regulator revealed several violations of state prohibitions against using credit cards for sports wagers.
From March 2023 through February 2024, DraftKings accepted 1,160 unlawful bets worth in excess of $83,000. The violations occurred across three different time periods and affected 218 customers who collectively made 242 credit card deposits.
Even though DraftKings voluntarily reported the violations, the MGC ruled that the violations originated with systemic breakdowns in communication and an improper internal framework.
The MGC determined that poor coordination between compliance, licensing, and product teams led to recurring violations, highlighting vulnerabilities in DraftKings' regulatory compliance framework.
