Robinhood has initiated a lawsuit against the State of Washington, alleging a “concrete and imminent threat” of legal action mirroring the state’s recent case against prediction market platform Kalshi. The financial services company filed the suit in the U.S. District Court for the Western District of Washington at Tacoma.

Washington's Action Against Kalshi

On Friday, Washington State Attorney General Nick Brown filed a lawsuit against Kalshi, claiming the platform facilitates illegal gambling. This action prompted Robinhood’s preemptive legal challenge.

Robinhood's Preemptive Strike

Robinhood is seeking an injunction to “prevent further harm” and to block Washington from enforcing state laws that the company believes are preempted by federal regulations. The lawsuit argues that the state’s actions are unconstitutional.

The Rise of Prediction Market Lawsuits

This case is part of a broader trend of escalating legal battles between state and tribal regulators and prediction market operators. More than a dozen such disputes are currently underway in courts across the country.

A Familiar Legal Pattern

The legal activity in Washington is reportedly following a pattern similar to that seen in Massachusetts, where Attorney General Andrea Joy Campbell took action against prediction markets in September. Prediction market operators contend they are federally regulated and therefore exempt from state gambling laws.

The Future of Prediction Market Regulation

As these cases become more frequent, the central question remains: how many court battles will it take for the issue of state gambling laws versus federal preemption to reach the U.S. Supreme Court? The increasing number of lawsuits suggests the possibility of a landmark ruling.

Amy Calistri, the author, has over 20 years of experience covering the sports and gambling industries.