Robinhood has sued Missouri and Attorney General Catherine L. Hanaway in federal court, seeking to stop the state from applying its gambling laws to the company’s sports event contracts.
The case, filed in the U.S. District Court for the Eastern District of Missouri, seeks a temporary restraining order as well as preliminary and permanent injunctions. SportsBettingDime reported that the action followed Missouri’s Sept. 16 cease-and-desist notice, which demanded that Robinhood stop offering the contracts in the state or obtain a Missouri Gaming Commission licence.
The notice was addressed to Robinhood Derivatives, LLC and gave the company 30 days to confirm that it had complied or ceased the activity. Missouri said it would pursue available enforcement measures if the company continued to violate state law.
Robinhood argues that the Commodity Exchange Act preempts Missouri’s gaming rules. Its counsel maintains that the Commodity Futures Trading Commission has comprehensive and exclusive authority over designated contract markets and their products, including event contracts listed on CFTC-regulated markets and facilitated by registered futures commission merchants. The complaint also contends that Missouri’s position conflicts with federal law under the Supremacy Clause.
Missouri takes the opposite view. The attorney general’s office has characterized the contracts as unlicensed sports wagering, arguing that companies cannot repackage sports bets as event contracts to evade state requirements. Its letter said operators offering online sports wagering to Missouri residents must hold a state licence, pay taxes and fees, and actively prevent people under 21 from betting.
The state’s letter alleged that Robinhood’s customer agreement allowed people aged 18 or older, when of legal age where they live, to place wagers through its platform. Missouri imposes a 10% tax on sports-wagering revenue, while initial online licence fees and five-year renewal fees can each reach $500,000.
Missouri’s action was part of its September enforcement effort against six prediction-market platforms, as we reported at the time. Voters approved regulated sports betting through Amendment 2 in 2024, and the state’s licensed market began operating on Dec. 1, 2025.
Robinhood’s legal theory follows the approach taken by Kalshi, which sued Missouri in late October after receiving a similar demand. The companies argue that Missouri’s licensing system does not provide a workable route for a federally regulated event-contract business: retail licences are limited to casino licensees, while online licences are limited to casino operators, professional sports teams and operators working through commercial agreements with them.
Robinhood also relies on an April 6 Third Circuit ruling involving Kalshi and New Jersey. A divided panel held that Kalshi was likely to succeed in its argument that its sports-related contracts were swaps under the Commodity Exchange Act and that federal law preempted New Jersey’s gambling laws as applied to them. Judge Jane R. Roth dissented, arguing that the products were gambling and that the presumption against preemption should carry particular weight in an area traditionally regulated by states.
The ruling was the first federal appellate decision on whether the CFTC has exclusive jurisdiction over sports-related event contracts, but courts have reached differing conclusions on preemption. The CFTC has separately proposed rules addressing when event-contract derivatives may be listed and how “gaming” should be defined, underscoring that the boundary between federal derivatives regulation and state gambling law remains contested.
