Robinhood Files Lawsuits Against Nevada and New Jersey Over Event Contracts

Highlights:

• Robinhood has filed lawsuits in Nevada and New Jersey over sports event contracts.
• Federal courts earlier sided with Kalshi, and Robinhood says states create unfair rules by blocking their own contracts.
• Robinhood has also expanded its markets to include football contracts.

Robinhood Derivatives filed lawsuits against regulators in Nevada and New Jersey on Tuesday. The company said the states threatened civil and criminal penalties over its sports-related event contracts. These complaints argue that state actions interfere with federal oversight, which the company believes should take precedence.

ROBINHOOD SUES NEW JERSEY AND NEVADA OVER SPORTS CONTRACT REGULATION

Robinhood Derivatives files lawsuits against New Jersey and Nevada regulators.

The firm seeks to block potential state action targeting its sports event contracts.

This move comes as state scrutiny grows on…

— CryptoEdge (@EdGeraldX) August 20, 2025

Robinhood explained that event contracts let users trade on the outcomes of real-world events. The company facilitates these trades on Kalshi, a federally regulated exchange. Robinhood said these contracts already fall under the authority of the Commodity Futures Trading Commission. Therefore, state regulators should not enforce separate restrictions.

The lawsuits mark a direct challenge to Nevada’s Gaming Control Board and New Jersey’s Division of Gaming Enforcement. Robinhood said officials refused to agree that its contracts could operate under federal court rulings favoring Kalshi. The company emphasized that these refusals left it with no choice but to take the dispute to federal court.

The two lawsuits allege that the disputes with the states could disrupt its customers and damage its growing business. The company warned that state actions would create uncertainty in a market where federal oversight already exists. This position underscores the seriousness of the conflict.

Robinhood Files Lawsuits Citing Kalshi Precedent

Robinhood based much of its argument on the precedent set by Kalshi. Earlier this year, Kalshi filed lawsuits against Nevada and New Jersey after receiving cease-and-desist letters. Both federal courts sided with Kalshi, ruling that federal law preempted state enforcement over sports-related contracts. Judges said Kalshi demonstrated a likelihood of success on its claims and risked harm without court protection.

Robinhood said it faces the same circumstances. The company argued it cannot compete fairly if Kalshi continues to operate while it faces penalties. In its New Jersey lawsuit, Robinhood said state officials refused to pause enforcement despite existing court orders in Kalshi’s favor. This difference in treatment, the company claimed, placed it at a disadvantage.

The company also pointed to conflicting legal outcomes. A federal judge in Maryland recently denied Kalshi’s request for similar relief, which created uncertainty in other jurisdictions. Robinhood said these differences illustrate the need for consistent application of federal law across states. The company also warned that state-level interference would fragment markets that Congress intended to remain uniform. Through its lawsuits, Robinhood asked federal judges to issue temporary restraining orders. The company said it requires immediate relief to prevent penalties from Nevada and New Jersey regulators.

Event Contracts Expansion Amid Ongoing Dispute

Robinhood launched its prediction markets hub earlier this year. The company also introduced markets tied to broader events, offering users access through Kalshi’s federally regulated exchange. A company spokesperson said Robinhood offers these contracts in compliance with federal requirements. The spokesperson also said the lawsuits reflect an effort to protect customers and ensure access to innovative markets. Robinhood stressed that its activities do not contradict the framework of the CFTC.

The legal actions arose a day after Robinhood launched its prediction markets in football. The move pointed to a conflict between company growth and state regulatory objections. Robinhood claimed that its Nevada and New Jersey customers should also have access to the same privilege enjoyed by users of Kalshi.

Robinhood just made football season a whole lot more interesting 🏈💸. They've teamed up with Kalshi to launch football prediction markets, letting users trade on the outcomes of NFL and college games. But here’s the twist—it’s not your typical sports betting. These contracts are… pic.twitter.com/8YFE87NbXM

— Seven Crypto 🐋 (@SevenWinse) August 20, 2025