Massachusetts opposes Robinhood bid to block enforcement of state gambling laws

Massachusetts has asked a court to reject Robinhood’s attempt to block state regulators from enforcing gambling laws against its event-based trading products, escalating a broader national clash over whether prediction markets fall under federal commodities oversight or state wagering rules.

The state filed a brief opposing Robinhood’s request for a preliminary injunction, arguing that federal law does not preempt state authority over gambling and sports-related contracts.

Massachusetts said Robinhood’s claim that its sports outcome-based products are legal nationwide was unfounded and dismissed the company’s preemption argument as “smoke and mirrors,” citing federal court rulings supporting state control over gambling regulation. The filing also referenced a similar case in Nevada involving Crypto.com, which was prevented from offering sports bets.

Robinhood has argued that its contracts on sports outcomes fall under the jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC), not state gambling authorities.

A parallel legal battle is unfolding in Ohio, where trading platform Kalshi sued the Ohio Casino Control Commission and the state attorney general on Oct. 7. Kalshi argues that its event-based markets are regulated at the federal level and seeks an injunction before Oct. 20 to prevent further state enforcement.

Ohio officials maintain that all sports wagering in the state must occur through licensed operators and reject Kalshi’s assertion that federal law nullifies state oversight.