Robinhood Derivatives has filed lawsuits against gaming regulators in Nevada and New Jersey, accusing them of unlawfully blocking its entry into the sports event contracts market despite favorable federal court rulings for competitor Kalshi. The legal actions, filed on August 19, 2025, seek court orders to prevent state regulators from taking enforcement actions against Robinhood's offering of these contracts, which allow users to speculate on outcomes of sports games, elections, and other events.
The dispute centers on the jurisdictional conflict between state gambling laws and federal oversight by the Commodity Futures Trading Commission (CFTC). Robinhood argues that federal courts earlier this year sided with Kalshi in similar cases, barring Nevada and New Jersey from enforcing cease-and-desist orders against the platform. Despite these rulings, Robinhood claims state regulators have continued to threaten legal action, creating an uneven playing field that could harm its business competitiveness.
In New Jersey, Robinhood contacted the Division of Gaming Enforcement to confirm it could operate under the Kalshi precedent but received no commitment from officials. In Nevada, the Gaming Control Board warned that offering event contracts would be treated as "willful violations" of state law. Robinhood is seeking temporary restraining orders to protect its operations while the lawsuits proceed, emphasizing that its contracts ultimately settle on Kalshi's CFTC-regulated platform.
The outcome of this legal battle could set significant precedents for prediction markets and event contracts in the U.S., influencing how emerging financial products navigate state-federal regulatory tensions.