Robinhood has sued gaming regulators in Nevada and New Jersey over allegations of attempts to block the rollout of the firm’s sports event contracts.
The retail brokerage firm filed two complaints at US District Court level for both states, in which Robinhood is looking to prevent the New Jersey Division of Gaming Enforcement (DGE) and the Nevada Gaming Control Board (NGCB) from using state-level gambling laws to ban users from trading the contracts.
As part of its complaint, Robinhood cited Kalshi’s recent court successes in similar cases, with the New York-based exchange securing a temporary restraining order (TRO) and a preliminary injunction against both the DGE and the NGCB.
However, opinion is split among US district court judges after the Maryland District Court recently rejected Kalshi’s bid for a temporary injunction, noting the company “failed to show a likelihood of success” in its battle with the Maryland Lottery and Gaming Control Commission (MLGCC).
Robinhood’s decision to sue the DGE and NGCB came on the same day, 19 August, it announced it had launched pro and college football prediction markets, enabling users to trade contracts directly within its own app.
The contracts are housed within Robinhood’s Prediction Markets hub and cover all regular NFL season fixtures, as well as all college Power 4 schools and independents.
Customers can trade on the outcomes of the games. This week, Kalshi added props, spreads and over/unders on football to its offering.
Robinhood customers based in both New Jersey and Nevada can currently access the contracts, with trades intermediated via Kalshi’s exchange.
Within its New Jersey complaint, Robinhood said it “continues to suffer [economic harms] in the marketplace while Kalshi is permitted to trade sports-related event contracts in New Jersey”.
“As a result, Robinhood now faces an immediate threat of civil penalties and criminal prosecution from the Division, along with the attendant reputational harm that any enforcement proceeding by the Division would cause,” it added.
Nevada had previously hit Robinhood, alongside Kalshi, with cease-and-desist orders.
In an email to Bloomberg Law, a Robinhood spokesperson wrote: “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.”
EGR has contacted Robinhood for comment.
The post Robinhood sues New Jersey and Nevada regulators in sports event contracts row first appeared on EGR Intel.
Retail brokerage submits two complaints to respective US District Courts amid concerns over “immediate threat of civil penalties and criminal prosecution” from state gaming regulators
The post Robinhood sues New Jersey and Nevada regulators in sports event contracts row first appeared on EGR Intel.