Robinhood sues the states of Nevada and New Jersey
The prediction market operator has gone on the offensive in protection of its sports events contracts.
Key points:
– Robinhood has sued the states of Nevada and New Jersey for preventing the local distribution of its sports events contracts
– The operator has targeted the states within which Kalshi’s recent preliminary injunctions were successful
– This move comes shortly after Robinhood’s launch of professional and College football events contracts
Prediction market operator Robinhood has officially filed lawsuits against the states of Nevada and New Jersey, individually, alleging that it has been prevented from distributing its sports-related events markets in the two jurisdictions.
This legal action has been filed in the US District Court(s) of both states – and seeks to prohibit state regulators and related officials from imposing gambling-related laws on the operator, as it (alongside other prediction market operators) claims that it is not offering gambling products.
Indeed, Robinhood’s fellow prediction market operator, Kalshi, was subject to identical legal scrutiny from a handful of US states earlier this year but was granted a preliminary injunction against the state regulators in the states of Nevada and New Jersey, specifically. However, Kalshi’s request for intervention against the state regulator of Maryland was denied.
Crucially, the sports-related events contracts around which this legal dispute is centred for Robinhood are, in fact, traded via the KalshiEx LLC derivatives platform. Now, having launched its prediction markets hub on Kalshi’s exchange earlier this year, Robinhood continues to clarify that its events contracts are regulated under the Commodity and Futures Trading Commission’s (CFTC) jurisdiction and therefore should not be subject to state-specific gambling laws.
Included as part of its official complaint, Robinhood stated: “If states could regulate some but not all entities relevant to these transactions, such regulation would infringe on the CFTC’s exclusive jurisdiction and fracture what Congress intended to be a uniform set of regulations for commodity futures and swaps trading.”
Good to know: Robinhood has submitted these latest legal challenges against Nevada and New Jersey less than 24 hours after launching professional and College football prediction markets via its derivatives
Indeed, the legal contention surrounding prediction markets – specifically those offering sports events contracts – in the US landscape still awaits resolution in the form of clarification from the CFTC as to the legality of these contracts under federal law.
Commenting further on this latest legal action, a Robinhood spokesperson said: “Our event contracts, including those for pro and college football, are offered in a compliant, federally regulated way through our CFTC registered Futures Commission Merchant, Robinhood Derivatives.”
“This is a decisive step forward in our mission to democratise finance for all and unlock even more innovative market opportunities for investors.”
Gambling Insider delivers the latest industry news, in-depth features, and operator reviews that you can trust. Our team combines rigorous editorial standards with decades of specialized expertise to ensure accuracy and fairness. We are committed to delivering clear, impartial, and dependable coverage across the global gambling sector.
