Robinhood Derivatives has filed lawsuits against regulators in Nevada and New Jersey, accusing them of blocking its entry into the sports event contracts market despite recent federal court rulings that favoured its rival Kalshi. The move highlights growing legal tensions between state regulators and platforms offering event contracts regulated by the US Commodity Futures Trading Commission (CFTC). At the same time, Robinhood is facing regulatory scrutiny in Europe over its new blockchain-based stock tokens tied to private companies such as OpenAI and SpaceX, launched on 30 June. Robinhood files lawsuits On Tuesday, Robinhood filed complaints claiming Nevada and New Jersey regulators had created an uneven playing field by ignoring federal court rulings that barred them from blocking Kalshi’s event contracts. Earlier this year, federal judges ruled that state gaming regulators could not enforce bans against Kalshi, which already offers contracts under CFTC oversight. Despite these rulings, Robinhood says both states threatened enforcement action. In New Jersey, the Division of Gaming Enforcement allegedly refused to confirm that Robinhood could operate under the Kalshi precedent and did not respond to follow-up requests for meetings. In Nevada, Robinhood claims the Gaming Control Board warned it would treat any event contract offerings as “wilful violations” of law. Robinhood is seeking temporary restraining orders to protect its operations while the lawsuits move forward. Both cases also ask the courts to prevent regulators from acting against the company. Kalshi rulings set precedent The lawsuits follow Kalshi’s own legal battles with Nevada and New Jersey earlier this year. Kalshi had sued both states after receiving cease-and-desist letters over its sports betting contracts. The company argued that CFTC oversight preempted state gambling laws, and federal courts sided with it, barring state regulators from intervening. Those cases remain active, but the rulings effectively opened the door for other platforms such as Robinhood to enter the market. Robinhood now argues that it should receive the same legal protection and treatment that Kalshi currently benefits from. The company’s derivatives platform allows trading in event contracts that ultimately settle on Kalshi. These contracts let users speculate on outcomes ranging from sports games to elections, aiming to bring additional transparency and price discovery mechanisms to the market. EU investigates stock tokens While the US lawsuits unfold, Robinhood is also facing a separate regulatory battle in Europe. On 30 June, it launched tokenised stock products linked to private companies, including OpenAI and SpaceX. These “Stock Tokens” are issued on Ethereum’s Arbitrum network and are available only to investors in the EU. The Bank of Lithuania has confirmed it is investigating the legality of the tokens and the disclosures provided to investors. The controversy intensified when OpenAI publicly denied involvement and warned investors to be cautious. Elon Musk also commented on the situation, calling OpenAI’s equity “fake” in response to the tokens, though he did not directly address the SpaceX-linked tokens. Robinhood later clarified that its tokens are not actual shares but price-tracking derivatives. The post Robinhood sues Nevada, New Jersey over sports event contracts appeared first on Invezz
