Robinhood has sued Washington State officials in federal court, claiming it faces an imminent threat of enforcement action after the state initiated legal action against the company’s event contracts partner Kalshi in state court last week.
In a U.S. District Court for the Western District of Washington complaint filed March 30, which names Washington Attorney General Nick Brown and Washington State Gambling Commission (WSGC) leadership as defendants, Robinhood asks a judge to grant it a permanent injunction and declaratory relief against the state.
Robinhood argues that Washington has no right to try to prevent prediction market exchanges from offering event contracts in the state, as the Commodity Futures Trading Commission‘s (CFTC) federal regulatory remit bestowed by the Commodity Exchange Act (CEA) supersedes state gaming laws and should preempt any attempt by the state to categorize those markets as illegal gambling.
Robinhood filed suit on Monday, the first weekday after Brown’s office sued Kalshi in state court on Friday, March 27.
Robinhood points to Kalshi lawsuit as a ‘threat’
In that filing, Brown argued that Kalshi is in violation of Washington’s Gambling Act and Consumer Protection Act because while it brands itself a prediction market, its event contracts “clearly” fall under the definition of illegal gambling in Washington. The only form of sports betting that is legal in Washington is wagering on tribal lands.
The AG wants a state judge to ban Kalshi from offering event contracts in the state.
Washington was the latest in a line of states to sue Kalshi in state court in recent weeks, after Massachusetts, Nevada, Michigan and Arizona.
In contrast to Kalshi, which is a Designated Contract Market (DCM), Robinhood works as a Futures Commission Merchant (FCM), partnering with DCMs as an intermediary that offers those companies’ contracts. Currently, Robinhood offers event contracts via Kalshi and ForecastEx, including on sports, politics and more. It intends to soon begin offering event contract trading via its own joint-venture DCM, Rothera.
After its partner Kalshi was sued in Washington state court, Robinhood quickly went on the offensive in federal court.
“Defendants’ threatened enforcement of Washington gambling laws is preempted by the CEA and the CFTC’s regulations pursuant to the Supremacy Clause,” wrote counsel for Robinhood. “By enforcing Washington gambling laws … against Robinhood for offering transactions involving event contracts via DCMs, such as Kalshi, ForecastEx, and Rothera, defendants would intrude on the CFTC’s exclusive jurisdiction to regulate those transactions.”
Robinhood says damage would be one-way and ‘irreparable’
As well as the new Kalshi lawsuit, Robinhood cited a public alert posted by the WSGC in December 2025, in which the regulator stated that it considers online operators that offer event-based contracts to be facilitating “unauthorized activity” in Washington State. It also noted that Washington has weighed in on a Ninth Circuit court appeal in which Robinhood is an opposing party.
Robinhood argued that it “has suffered and continues to suffer irreparable harm” as a result of perceived threats by Washington officials to take enforcement action against companies offering event contracts in the state. It added that given its status as a partner of Kalshi, “the enforcement risk against it is particularly acute.”
“In light of the civil enforcement action Washington commenced against Kalshi, WSGC’s formal guidance declaring prediction markets ‘unauthorized’ in Washington, and Washington’s multijurisdictional advocacy in support of state regulators in event contract litigation … there is a concrete and imminent threat that Washington will file an enforcement action against Robinhood as it did against Kalshi,” states the filing.
The firm claimed that the equities and public interest tilt strongly in its favor partly because the state and the public would suffer little to no harm if Robinhood’s requested relief was granted.
Robinhood replicates Massachusetts court pattern
The arguments in Robinhood’s Washington lawsuit are similar to the ones it made when it filed a federal court complaint against Massachusetts’ AG and gaming commission last September, days after the state’s AG Andrea Joy Campbell sued Kalshi in state court.
Kalshi and Robinhood are both also embroiled in legal cases in other states including New Jersey, Nevada and California. It stopped offering event contracts in Nevada in November after its motion for an injunction was denied. Kalshi has also since been forced offline temporarily in that state.
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