Quick Takeaways
- To halt enforcement of event contracts, Robinhood Derivatives is suing Nevada and New Jersey.
- The company argues it should get the same federal protection that Kalshi got earlier this year.
- These lawsuits could reshape the future of prediction markets in the U.S.
Introduction
Robinhood Derivatives is pushing back hard against two state regulators it believes are standing in the way of innovation.
After receiving threats of enforcement from New Jersey and Nevada over offering event contracts, the company filed lawsuits to protect both its users and its future in the prediction market space.
Robinhood Derivatives Says Enough Is Enough After Federal Green Light
Earlier this year, a major legal win for prediction market platform Kalshi shook things up.
Federal courts ruled that Kalshi could legally offer event contracts that let people bet on things like sports games, elections, and other real-world outcomes because they’re regulated by the Commodity Futures Trading Commission (CFTC), not state gaming boards.
Watching the door swing wide, the Robinhood Derivatives team glided in, bright white sleeves rolled, ready to pitch the same kind of instant-access contracts you’ve seen.
But the welcome was far from warm. Despite the court rulings in Kalshi’s favor, regulators in both New Jersey and Nevada kept warning Robinhood to back off.
So, the company hit back with two lawsuits filed this week aiming to stop the states from going after them unfairly.
Robinhood Derivatives Wants a Level Playing Field
Here’s where it gets personal for Robinhood Derivatives. The company isn’t just saying the states are wrong they’re saying it’s unfair.
Why should Kalshi get the green light to operate while Robinhood is told to sit on the sidelines?
The lawsuits claim that Robinhood made an effort to be helpful.
They got in touch with the New Jersey Division of Gaming Enforcement to find out additional details. But instead of working together, Robinhood says officials gave no promises, and no real answers.
Nevada wasn’t much better. There, the state Gaming Control Board allegedly told the company that if it went ahead with the contracts, it would be seen as deliberately breaking the law.
Robinhood even offered to offer only the same contracts Kalshi does temporarily but got a firm no.
So now, Robinhood is asking federal courts to step in, just like they did for Kalshi, and stop the states from blocking its business.
Why This Legal Fight Over Event Contracts Actually Matters
This isn’t just about Robinhood or Kalshi. This is about who gets to call the shots when it comes to new ways of trading and betting online.
Event contracts are part of a growing trend where finance, tech, and prediction markets intersect. The federal government specifically the CFTC, says these contracts are legal and regulated. But some state gaming authorities still think they fall under their rules.
If Robinhood wins, it could open the door for more platforms to enter the market without facing a patchwork of conflicting rules.
If it loses, though, states could regain power to shut down these new trading products no matter what federal courts say.
This legal tension isn’t going away anytime soon.
