BOSTON — Robinhood Derivatives LLC filed a federal lawsuit on September 15, 2025, against Massachusetts Attorney General Andrea Joy Campbell and the Massachusetts Gaming Commission (MGC), seeking an injunction to prevent state authorities from shutting down its sports event contract trading operations in the Commonwealth.
The lawsuit, filed in the U.S. District Court for the District of Massachusetts, requests judicial intervention to protect Robinhood’s business activities related to federally regulated prediction markets through its partnership with Kalshi.
Legal Challenge Centers on Federal Preemption
Robinhood argues that state intervention would violate the Supremacy Clause of the U.S. Constitution by attempting to supersede the Commodity Exchange Act (CEA). The company maintains that sports event contracts offered through Kalshi fall under exclusive federal jurisdiction of the Commodity Futures Trading Commission (CFTC), not state gaming regulators.
“Robinhood has filed the lawsuit in Massachusetts to preserve its customers’ access to federally regulated contract trading, consistent with our past actions in other jurisdictions,” a company spokesperson stated.
The legal action comes three days after Massachusetts Attorney General Andrea Joy Campbell and the MGC sued Kalshi in Suffolk County Superior Court, alleging the CFTC-licensed platform operates as an unlicensed sports betting service in violation of state law.
State Regulators Defend Consumer Protection Framework
Attorney General Campbell filed the original complaint against Kalshi, claiming the platform accepts sports wagers without proper state licensing or consumer protections required under Massachusetts law.
“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” Campbell stated in announcing the Kalshi lawsuit. “If Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws.”
MGC Chair Jordan Maynard supported the enforcement action, noting concerns about prediction market companies expanding into sports wagering while bypassing age restrictions, player protection programs, state taxes, and consumer safeguards.
“Prediction market companies are expanding into sports wagering while neglecting age restrictions, player protection programs, state taxes, and other consumer protections,” Maynard said. “My fellow commissioners and I appreciate the Attorney General’s efforts to enforce the law and hold these companies accountable to Massachusetts’ rigorous standards.”
Multi-State Legal Battle Continues
The Massachusetts case represents the latest chapter in ongoing legal disputes between prediction market operators and state gaming regulators across multiple jurisdictions. Kalshi has received cease-and-desist orders from five states: Massachusetts, Arizona, Illinois, Montana, and Ohio.
Robinhood faces similar challenges in other states, having filed comparable federal lawsuits in Nevada and New Jersey. The company argues that federal regulation under the CFTC provides exclusive oversight authority over its sports-related event contracts, preempting state gambling laws.
The Massachusetts complaint specifically targets how Kalshi presents its products, alleging the platform mimics traditional sportsbook experiences through leaderboards and promotional mechanisms that encourage repeat trading, raising problem gambling concerns among state officials.
Federal vs. State Jurisdiction at Stake
The core legal question centers on whether federally regulated prediction markets fall outside state gaming jurisdiction. Robinhood contends that state officials lack authority over prediction markets operated by CFTC-licensed entities like Kalshi.
Robinhood named Campbell and all five MGC commissioners as defendants, including Chair Jordan Maynard. The company seeks a court declaration that state intervention would violate federal law and an injunction preventing enforcement actions against its operations.
The case highlights broader tensions between emerging financial technology platforms and traditional state gaming regulatory frameworks, with significant implications for the prediction market industry.
Legal experts note that the federal court will need to determine whether complete preemption applies, potentially redirecting the dispute from state to federal jurisdiction based on the Commodity Exchange Act’s exclusive federal oversight provisions.
Both the Attorney General’s office and the Massachusetts Gaming Commission declined to comment on the pending litigation.
About Massachusetts Gaming Regulation
The Massachusetts Gaming Commission regulates legal casino, horse racing, and sports wagering industries with a mission to maximize consumer protections, minimize negative impacts, and promote responsible gaming through regulation, research, and informed policy making.
