Robinhood Sues Nevada, New Jersey Over Sports Wager Threats (2)

Robinhood Derivatives LLC sued two states’ gaming officials for allegedly trying to prevent it from offering sports-related event contracts in Nevada and New Jersey.

The complaints, filed Tuesday in the US district courts for the districts of Nevada and New Jersey, seek to enjoin the state officials from enforcing state gaming or gambling laws against Robinhood for its facilitation of transactions involving sport-related event contracts.

An event contract lets customers trade on potential outcomes of future events, like who might win an election or football game. Robinhood’s contracts trade on derivatives trading platform KalshiEx LLC, which the Commodity Futures Trading Commission named a designated contract market almost five years ago.

Robinhood’s complaints pointed to other federal court orders offering Kalshi preliminary relief. The districts of Nevada and New Jersey held earlier this year that Kalshi showed a likelihood of success on the merits of its argument that state law on sports wagers is preempted by a federal act regulating commodity futures and swaps trading and that it would suffer irreparable harm without relief. A federal judge in Maryland recently denied Kalshi’s similar request, splitting with these states.

Robinhood’s legal pursuits come as a result of it activating customers’ access to sports-related trading in both states after not reaching an agreement with the Nevada Gaming Control Board and New Jersey Division of Gaming Enforcement. The company says that it faces an “immediate threat of civil penalties and criminal prosecution” from state officials and was left with no other choice but to sue in federal courts.

“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,” Robinhood’s complaints said.

Robinhood launched its prediction markets hub earlier this year and intermediates customers’ trades on Kalshi’s exchange. The company filed these suits the day it launched its pro and college football prediction markets.

“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,” a Robinhood spokesperson said of the legal action in an email. “This is a decisive step forward in our mission to democratize finance for all and unlock even more innovative market opportunities for investors.”

Nevada and New Jersey’s attorneys general offices declined to comment.

Cravath, Swaine & Moore LLP represents Robinhood in both suits. Pisanelli Bice PLLC is local counsel in Nevada and Chiesa Shahinian & Giantomasi PC is in New Jersey.

The cases are Robinhood Derivatives, LLC v. Dreitzer, D. Nev., No. 2:25-cv-01541, complaint filed 8/19/25 and Robinhood Derivatives, LLC v. Flaherty, D.N.J., No. 1:25-cv-14723, complaint filed 8/19/25.