Adam Roarty is a journalist covering sports betting, regulation, and industry innovation for CasinoBeats. His coverage includes tax increases in the UK, covering breaking stories in the ever-evolving landscape of US betting such as the...
Read Full BioRobinhood has joined Kalshi‘s legal fight in Massachusetts by filing a lawsuit against the state’s Attorney General (AG) and Gaming Commission (MGC).
AG Andrea Joy Campbell filed a lawsuit against Kalshi on Friday, accusing the platform of operating unlicensed sports wagering.
The lawsuit requested an immediate injunction to halt Kalshi’s operations in the state and also mentioned that Robinhood had aided the operations.
The company responded by filing its own lawsuit, which states, “Massachusetts law is preempted by the Commodity Exchange Act’s (CEA) comprehensive federal framework for regulating commodity futures and swaps trading.”
The 28-page document goes on to mention “preempt” 43 times as Robinhood makes its argument clear. The company and Kalshi continue to argue that state regulators and AGs have no authority over event contracts, sports, or otherwise.
The company filed the lawsuit as it believed there was a “real and imminent threat that Massachusetts will file a similar complaint and motion against Robinhood.”
Robinhood Targeting Authorities to Enrich Masses
Robinhood, which initially withdrew from states that issued cease-and-desist letters, has ramped up the availability of Kalshi’s markets on its app for the new football season.
A spokesperson for the company has reiterated its belief that the markets are fair and legal, telling Casino Beats, “We believe in the power of prediction markets and the important role they play at the intersection of trading, news, economics, politics, culture, and sports.
“Every eligible customer should have access to these markets, which are federally regulated through our CFTC-registered Futures Commission Merchant. This step, consistent with our past actions in other jurisdictions, aims to preserve access for those in Massachusetts.”
In addition to suing Massachusetts, the company filed lawsuits in New Jersey and Nevada last month. In relation to those lawsuits, it said, “This is a decisive step forward in our mission to democratize finance for all and unlock even more innovative market opportunities for investors.”
Massachusetts AG Ready for Fight
The lack of resolution in the court battles between states and Kalshi and Robinhood has not dissuaded Campbell from joining the fight.
She emphatically ended a post on X yesterday by stating, “We’re suing.”
Unlike other states, Massachusetts has made the decision to sue rather than issue a cease-and-desist letter. Robinhood’s lawsuit is also slightly different.
Lawyer Andrew Kim broke down the details in a thread on X, which stated the suit “presents some fascinating legal questions, because it might implicate abstention issues.” These issues relate to the relationship between federal and state courts, adding extra complications to the cases.
For now, it is unlikely there will be any immediate action that will change the continued expansion of sports prediction markets. Massachusetts may take inspiration from Maryland, where a judge refused to grant Kalshi an injunction as had been done in Nevada and New Jersey.
As more and more states join the fight against the platforms, we expect cases to become stronger. Whether this leads to any limitations placed on prediction markets remains to be seen.
A hearing will take place on the motion for a preliminary injunction against Kalshi on Monday, September 22.
