Robinhood sues regulators as sports event contracts resume in New Jersey and Nevada

Robinhood says more than 60,000 of its customers in New Jersey and Nevada are at risk of losing access to its newly relaunched sports event contracts, as it seeks federal court protection from potential state enforcement actions.

The company filed nearly identical lawsuits Tuesday against the New Jersey Division of Gaming Enforcement and the Nevada Gaming Control Board. The suits ask the courts to block the agencies from pursuing enforcement while Robinhood reopens its contracts in both states.

The lawsuits were filed the same day Robinhood announced new prediction markets tied to professional and college football outcomes.

A Robinhood spokesperson told Front Office Sports that the contracts “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 democratize finance for all and unlock even more innovative market opportunities for investors,” the spokesperson added.

Robinhood suspended its contracts in March after regulators in New Jersey and Nevada issued cease-and-desist orders threatening enforcement if offerings continued. The decision contrasted with Kalshi, another event contract platform, which continued operations while pursuing legal challenges.

Kalshi has faced notices from regulators in at least seven states. It filed suits against New Jersey, Nevada, and Maryland earlier this year, arguing its contracts fall under the jurisdiction of the Commodity Futures Trading Commission. Federal judges in New Jersey and Nevada ruled regulators could not block Kalshi’s contracts during ongoing litigation.

Robinhood’s new lawsuits state that “despite those rulings,” regulators in both states continue to “threaten” enforcement, placing the company at risk of “immediate and irreparable harm.” The filings also note Robinhood attempted discussions with regulators, but officials said they could not agree to withhold enforcement actions.

The company says it has more than 48,000 customers in New Jersey and 12,000 in Nevada. The suits add that “goodwill, once lost, cannot easily or quickly be regained, even if Robinhood ultimately prevails in litigation.”

Unlike Kalshi, Robinhood did not sue Maryland regulators. A federal judge there recently ruled Kalshi must comply with state gambling regulations, though the decision is under appeal. Maryland’s regulator has agreed not to enforce state law until the 4th Circuit issues a ruling.

Robinhood has had interruptions in its efforts to launch sports event contracts. Earlier this year, it announced a Super Bowl trading option through a partnership with Kalshi but suspended the rollout at the request of the Commodity Futures Trading Commission. The companies later announced a partnership for March Madness markets, but Robinhood withdrew the contracts in New Jersey following regulator pressure.