Robinhood Derivatives has filed lawsuits in US District Courts against the Nevada Gaming Control Board, the New Jersey Division of Gaming Enforcement, and their respective attorneys general. The dispute highlights a growing tension between federal oversight of commodities and state-level gaming laws, raising key questions about jurisdiction and the future of prediction markets in the US.
Lawsuits overview
Robinhood Derivatives claims that these state agencies are trying to block its federally regulated event contracts, which it argues fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). The company is seeking court orders to stop the states from applying gaming laws to its contracts, asserting that these are not standard sports bets but federally approved financial instruments.
Event contracts allow traders to speculate on the outcomes of specific events such as sports games, elections, or economic reports. Unlike traditional sports betting, these are standardised financial instruments traded on regulated platforms. The CFTC regulates these contracts under its authority over commodity futures and swaps. Robinhood argues that this federal oversight prevents state gaming regulators from interfering.
“This is a decisive step forward in our mission to democratise finance for all and unlock even more innovative market opportunities for investors.”
– Robinhood’s Spokesperson
Clash of jurisdictions
The dispute between Robinhood Derivatives and state regulators centres on who has the authority to oversee event contracts. The CFTC views these contracts as commodity derivatives, falling under federal regulation. In contrast, state agencies argue that contracts involving outcomes tied to sports or gambling fall within the scope of state gaming laws. Robinhood maintains that allowing states to regulate specific contracts undermines the federal framework intended by Congress and creates regulatory inconsistency.
Robinhood stated in the complaint, “If states could regulate some but not all entities relevant to these transactions, such regulation would infringe on the CFTC’s exclusive jurisdiction and fracture what Congress intended to be a uniform set of regulations for commodity futures and swaps trading.”
Timeline of dispute
In early 2025, Robinhood began offering event contracts in Nevada and New Jersey. On 28 March 2025, the New Jersey Division of Gaming Enforcement issued cease-and-desist letters to Robinhood and Kalshi, accusing them of unauthorised sports wagering. In April, the Ohio Casino Control Commission took similar action. By summer, tribal gaming groups in California filed lawsuits against both companies, alleging illegal sports betting activities.
The stakes for Robinhood
In an exclusive statement to SiGMA News, the Robinhood spokesperson said the company’s event contracts, including those tied to professional and college football, are offered through a federally regulated platform. Robinhood described the lawsuits as part of its effort to expand access to financial markets.
Robinhood stated, “Our event contracts, including those for pro and college football, are offered in a compliant, federally regulated way through our CFTC-registered Futures Commission Merchant, Robinhood Derivatives.”
Event contracts market and regulatory pushback
Robinhood has seen over two billion event contracts traded since launching its prediction markets, expanding beyond sports to include areas like cryptocurrency, economic data, and cultural events. Meanwhile, offshore platforms such as Polymarket continue to lead parts of the market but limit U.S. access to avoid legal issues, highlighting global demand for event-based trading.
In the US, regulators in Ohio and tribal gaming authorities in California have also taken action against Robinhood’s contracts, citing broader resistance among state and tribal bodies to federally regulated prediction markets involving sports.
