Robinhood Derivatives has sued gaming officials in Nevada and New Jersey for trying to prevent it from offering sports event contracts through the prediction markets platform KalshiEx, which the Commodity Futures Trading Commission regulates.
Key Takeaways
- Robinhood sued Nevada and New Jersey
- Federal courts split this year on Kalshi's request for relief
- The legal actions coincide with Robinhood's launch of football prediction markets
The filings cite earlier federal rulings granting Kalshi preliminary relief in Nevada and New Jersey on federal preemption grounds, while noting a conflicting Maryland decision. Robinhood said it enabled access in both states after talks with regulators stalled and warned it faces potential penalties without court protection.
Robinhood's complaints, filed in the federal district courts for Nevada and New Jersey, ask judges to enjoin state officials from applying gaming statutes to event-contract trading. The company argues that the Commodity Exchange Act framework for futures and swaps preempts state wagering rules when contracts are listed on a federally regulated market such as Kalshi.
The filings point to preliminary injunction orders issued earlier this year in cases involving Kalshi in both states, where courts found a likelihood of success on preemption and risk of irreparable harm absent relief. They also acknowledge a recent Maryland ruling that declined similar relief, highlighting a growing split.
Robinhood said it activated sports-related trading access in Nevada and New Jersey only after failing to reach accommodations with the Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement, and that it faces an immediate threat of civil or criminal sanctions without judicial intervention.
Robinhood begins football prediction markets phased launch
Alongside the litigation, Robinhood announced new prediction markets for professional and college football. Customers can trade outcomes for prominent NFL games and matchups featuring all Power Four college programs within the app.
The rollout is staged to cover the opening two weeks of the regular seasons and then expand to weekly slates. Robinhood framed these markets as user-to-user exchanges where participants set prices rather than a sportsbook "house," with planned trading availability from 8 a.m. to 3 a.m. ET daily.
The company said its broader prediction markets, unveiled late last year, have already seen more than two billion contracts traded, and it reported a one-year share-price increase of over 400%.
California tribes escalate challenges and broader regulatory friction
Separate regional pressure is building in California, where the Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians have sued Robinhood and Kalshi in federal court.
They're seeking an injunction on claims the sports markets violate the Indian Gaming Regulatory Act and tribal-state compacts. Kalshi declined to comment.
The companies list futures on league champions, awards, tournament winners, and single-game markets resembling moneyline bets.
Kalshi has received cease-and-desist letters from multiple states and has brought its own suits in New Jersey, Nevada, and Maryland, continuing to operate in New Jersey after early success there.
