Massachusetts is seeing a new court fight over sports betting. Robinhood has filed a lawsuit against the Massachusetts Gaming Commission and the state Attorney General.
The company says state gambling laws should not apply to its users’ trades in sports event contracts offered through Kalshi, a federally regulated exchange. The filing comes days after the Attorney General sued Kalshi for allegedly running unlicensed sports wagering in the state.
Robinhood is asking a federal judge to block Massachusetts from enforcing its rules against the app and its customers.
Why Robinhood Sued
Robinhood’s core claim is simple: trades in event contracts on Kalshi are regulated by the CFTC under the Commodity Exchange Act. Because of that, the company argues state gambling laws are preempted and cannot be used against its platform.
In its complaint, Robinhood asks for a permanent injunction and a court declaration that Massachusetts gaming laws do not apply to these trades.
The filing points to the Attorney General’s recent case against Kalshi. In that suit, the state sought an emergency injunction to halt sports-related event contracts for Massachusetts users.
That order would have swept in partners “in active concert,” which includes Robinhood because the app lets customers access Kalshi’s markets. Robinhood says the threat of a similar action against it is “real and imminent.”
Massachusetts argues that Kalshi is offering MA sports betting without a license from the Gaming Commission. Officials say the platform risks consumer harm and lacks the sort of responsible gambling controls seen in licensed sportsbooks in Massachusetts.
Robinhood counters that it merely intermediates trades on a federally supervised exchange and should not be treated like a sportsbook under state law.
What Happens Next in Massachusetts
The legal chessboard moved quickly. After the state filed its case, Kalshi shifted (or “removed”) the lawsuit from state court to federal court in Boston.
That move paused a planned hearing in state court and puts the focus on federal questions like preemption under the Commodity Exchange Act.
Robinhood’s case is also in federal court, setting up parallel battles that could decide if prediction markets can operate in Massachusetts.
This fight is part of a broader national trend. Other states have taken different positions while similar cases play out. Courts in Nevada and New Jersey have given Kalshi some early relief, while a Maryland court did not.
How Massachusetts lands may shape access to sports markets for local users and set boundaries between federal market rules and state gambling laws. For now, licensed sportsbooks in Massachusetts remain unchanged, but the outcome here could influence how new prediction products fit under existing regulations.
If the courts side with Robinhood, the company could keep offering Kalshi access inside its app without MGC oversight. If the state prevails, Robinhood may need a license, newsafeguards, or to stop sports event contracts for Bay Staters.
Either way, the decision will be closely watched by the sports betting industry, regulators, and everyday traders.
