• Loading stock data...
Thursday, April 24, 2025

Kalshi Sues After Robinhood Takes Down New Jersey March Madness Markets

Robinhood has taken down NCAA Tournament prediction markets in New Jersey after receiving a cease and desist letter from state regulators.

Mar 27, 2025; Newark, NJ, USA; A view of March Madness signage and the court before an East Regional semifinal of the 2025 NCAA tournament between the Alabama Crimson Tide and the Brigham Young Cougars at Prudential Center.
Vincent Carchietta-Imagn Images

Robinhood has pulled its betting markets for the NCAA Tournament out of New Jersey after pressure from regulators. 

The New Jersey Department of Gaming Enforcement sent a cease and desist letter to Robinhood and Kalshi—the stock trading app’s partner in the endeavor—on Thursday, accusing them of “listing unauthorized sports wagers.”

“Event contracts offered by Robinhood Derivatives are federally regulated by the CFTC and offered through CFTC-registered entities, assuring that retail customers can access these prediction markets in a safe and regulated manner,” a Robinhood spokesperson said. “While we do not believe these contracts run afoul of any state laws, we are no longer allowing New Jersey residents to enter new positions for the Men’s and Women’s Basketball Tournament event contacts.” 

Other prediction markets that Robinhood partnered with Kalshi on, such as what the target Fed funds rate will be in May, remain live.

A Kalshi spokesperson said, “Kalshi believes in the value of regulation and operates under the comprehensive oversight of the Commodity Futures Trading Commission. We look forward to engaging with the state of New Jersey to resolve this matter.”

The statement did not address Robinhood’s decision to pull out of the sports markets in New Jersey. Robinhood also pulled out of a partnership the two companies had to offer Super Bowl betting under pressure from regulators. 

Dustin Gouker’s Closing Line first reported on the developments in New Jersey

Robinhood began offering event contracts for March Madness earlier this month. Kalshi, which is regulated by the Commodity Futures Trading Commission, offers event contracts on many sports, including tennis, golf, basketball and Formula 1. 

Kalshi is now battling regulators in several states. Nevada issued a cease and desist letter to the exchange earlier this month, noting that its event-based contracts on sports are illegal in the state. The Nevada Gaming Control Board then agreed to give Kalshi longer than the original 10-day deadline to address the matter. Massachusetts has also launched a probe

On Saturday, Kalshi announced it had filed suits in federal court against both the Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement. Kalshi founder Tarek Mansour said in a statement that “the threatened actions in Nevada and New Jersey seek to undermine not just Kalshi’s contracts, but the authority granted by Congress to the Commodity Futures Trading Commission.”

The issue, as alluded to in Robinhood’s statement, is whether these prediction markets are regulated federally (by the CFTC) or at the state level. If it’s the former, the model poses a threat to traditional sportsbooks like FanDuel and DraftKings, which are not available in states like Texas and California, and which must pay high state taxes on their sports betting markets. Currently, sports betting is legal in 39 states whereas Kalshi is live in all 50 states. 

While Kalshi’s sports betting offering includes mostly futures with a smattering of single-game events, it would be a greater threat to traditional sportsbooks if/when there are markets for player props, point spreads, and parlays. 

Linkedin
Whatsapp
Copy Link
Link Copied
Link Copied

What to Read

NC State women's cross country

Judge Threatens to Reject $2.8 Billion House v. NCAA Settlement

The NCAA and power conferences could end up at trial.
Olympic rings

SafeSport Fires CEO Amid Scandal

Ju’Riese Colón was hired in 2019, two years after the agency’s founding.
Jul 20, 2022; Minneapolis, MN, USA; Everton defender Nathan Patterson (3) challenged by Minnesota United forward Luis Amarilla (9) in the first half at Allianz Field.

Everton Accelerates Rebound With Addition of Texans Minority Owner

Friedkin acquired Everton in December after a prolonged sale process.
Vancouver

PWHL Picks Vancouver for First Expansion Team

More than 19,000 fans attended a game in Vancouver in January.

Featured Today

Apr 5, 2025; San Antonio, TX, USA; Duke Blue Devils forward Cooper Flagg (2) reacts after a three point basket against the Houston Cougars during the first half in the semifinals of the men's Final Four of the 2025 NCAA Tournament at the Alamodome.

Cooper Flagg’s Timing Is Perfect for the NBA and USA Basketball

The projected No. 1 pick just declared for the draft.
Apr 14, 2025; New York, New York, USA; Paige Bueckers is interviewed by ESPN after being selected with the number one overall pick to the Dallas Wings in the 2025 WNBA Draft at The Shed at Hudson Yards
April 21, 2025

ESPN’s WNBA Coverage Mirrors the League’s Stunning Growth

“I don’t think we stand still in our coverage of women’s sports,” says Rowe.
Mar 16, 2025; Milwaukee, Wisconsin, USA; Oklahoma City Thunder guard Shai Gilgeous-Alexander (2) celebrates with guard Isaiah Joe (11) after score in the fourth quarter against the Milwaukee Bucks at Fiserv Forum.
April 20, 2025

Unorthodox OKC: The Thunder Redefined Tanking to Become NBA’s Best

A rebuild years in the making has OKC in the driver’s seat.
Mar 13, 2020; Augusta, GA, USA; The front entrance at Augusta National Golf Club in Augusta, Ga., Friday morning. The Masters Tournament has been postponed due to coronavirus concerns.
opinion
April 20, 2025

What’s It Like to Play Augusta? A Day on the World’s Most..

Inside a round at the most exclusive club in the world.
Apr 22, 2025; Los Angeles, California, USA; Los Angeles Lakers guard Luka Doncic (77) shoots the ball over Minnesota Timberwolves forward Julius Randle (30) during the third quarter of game two of first round for the 2024 NBA Playoffs at Crypto.com Arena.

Kalshi’s Offensive Blitz Continues With Suit Against Maryland

Kalshi previously sued regulators in Nevada and New Jersey.
April 16, 2025

Sports Prediction Markets Still Face Legal Roadblocks

The Wire Act and tribal sovereignty could be the next legal battlegrounds.
The sun rises behind the New York skyline seen from the Jersey City waterfront on Thursday morning Dec. 10, 2020.
April 22, 2025

N.Y. Sports Betting Faces Major Limits Under New Proposal

Newly proposed legislation would impose daily betting caps and limit advertising.
Sponsored

Game On: Portfolio Players Stories, Brought to You by E*TRADE from Morgan Stanley

This week, Two-time Super Bowl Champion and CBS NFL analyst Logan Ryan joins us to talk the business of sports on our third installment of Portfolio Players.
April 14, 2025

Bank Says Sports Betting Could Weather Tariff Storm

Lower tax revenues could encourage more states to legalize sports betting.
Sports gambling reached an all-time high in 2022.
April 9, 2025

Kalshi Gears Up for Legal Fight With States

Maryland followed at least five other states that have sent cease-and-desist letters.
Potawatomi Sports Book patrons the University of Wisconsin men play UCLA on Friday, March 14, 2025. The venue is open for the first time during March Madness and is expecting to be busy over the next few weeks in Milwaukee.
April 8, 2025

Kalshi Notches Legal Win in Fight With Nevada

Kalshi can keep offering its sports event contracts in Nevada—for now.
Potawatomi Sportsbook patrons watch the University of Wisconsin men play UCLA on Friday, March 14, 2025. The venue is open for the first time during March Madness and is expecting to be busy over the next few weeks in Milwaukee.
April 4, 2025

All Signs Point to Trump Admin OK’ing Kalshi’s Sports Contracts

The federal government appears ready to approve Kalshi’s sports event contracts.