Robinhood Derivatives Sues Nevada, New Jersey Over Sports Contracts

Robinhood Derivatives LLC, a subsidiary of the crypto-friendly trading platform Robinhood, has filed lawsuits against gaming regulators in Nevada and New Jersey. The legal action stems from state attempts to block trading on sports-related event contracts, such as football game outcomes. The company argues these restrictions conflict with federal oversight by the Commodity Futures Trading Commission.

The case draws parallels to KalshiEx LLC, a CFTC-approved rival platform that has offered similar contracts for nearly five years. Federal courts have previously signaled that commodity futures regulations likely preempt state-level restrictions on such wagers. However, a recent contradictory ruling in Maryland highlights the legal uncertainty surrounding this jurisdictional clash.

Robinhood activated sports-related trading in both states without regulatory approval, exposing itself to potential civil and criminal penalties. The lawsuits seek to clarify whether federal commodity trading laws supersede state gambling regulations—a decision that could reshape how financial instruments tied to sporting events are traded nationwide.