Just days after Massachusetts Attorney General Andrea Joy Campbell announced the state filed a lawsuit against prediction platform Kalshi, another trading company took action to protect itself against legal complications.
Key Takeaways
- Robinhood cites business protection as the reason for asking a federal court to keep Massachusetts from coming after it.
- The trading exchange offers sports prediction markets through a partnership with Kalshi.
- Robinhood argued it had no choice but to file the lawsuit after Kalshi was hit with one.
Robinhood, a popular exchange that offers sports event outcome contracts through a partnership with Kalshi, filed a lawsuit against the Attorney General and the Massachusetts Gaming Commission in a federal court Monday.
BREAKING: Robinhood has filed a lawsuit in Mass. federal court against the @MassAGO and @MassGamingComm to block the two state agencies "from enforcing preempted Massachusetts law against Robinhood for its facilitation of transactions involving sports-related event contracts." pic.twitter.com/l0m1SFekqm
— Daniel Wallach (@WALLACHLEGAL) September 15, 2025
Robinhood requested that the court prohibit Massachusetts from “enforcing preempted law” against the trading company for offering sports prediction markets, citing a protection of its business in the Bay State.
“In light of Massachusetts’s complaint against Kalshi and because Robinhood intermediates its sports-related event contract trades on Kalshi’s exchange, there is a real and imminent threat that Massachusetts will file a similar complaint and motion against Robinhood,” the company stated in the court filing. “Were it to do so, Robinhood would face an immediate threat of civil penalties and potentially criminal penalties as well, along with the attendant reputational harm that such an enforcement proceeding would cause.”
‘No choice’ but to sue
Robinhood only offers sports markets on the NFL and other leagues through Kalshi’s exchange. The company said it had “no choice” but to sue Massachusetts and argues that Robinhood users would “abruptly” lose the ability to trade sports contracts if the court doesn’t keep the state from coming after it.
Gaming lawyer Daniel Wallach said on X that “rather than intervene in the pending state court lawsuit against Kalshi as an adversely aggrieved party, Robinhood just ‘forum-shopped’ into federal court to avoid the more rigorous ‘complete preemption’ analysis.”
Going after prediction markets
Robinhood mentioned that Kalshi is federally regulated by the Commodity Futures Trading Commission, but that didn’t stop Massachusetts from attempting to shut down the prediction platform Friday for illegally offering sports contract purchasing in a state with legal sports betting.
Bay State law enforcement and regulators argue Kalshi’s online exchange and sports contracts are a sports betting market that is unlicensed and untaxed in Massachusetts.
“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” Campbell said. “This lawsuit will ensure that if Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws.”
Massachusetts isn’t the first state to battle Kalshi. Five other jurisdictions that operate legal sports betting have issued cease-and-desist orders, while Nevada, Maryland, and New Jersey have also run into legal issues and lawsuits with Kalshi over federal versus state regulation.
