Robinhood Halts NCAA Prediction Markets in New Jersey

Robinhood halts NCAA prediction markets in New Jersey after regulatory pressure, highlighting legal battles over sports betting regulation.

Key Points:

• Robinhood removed its NCAA Tournament prediction markets in New Jersey following regulatory pressure and a cease-and-desist letter.
• Kalshi filed lawsuits against Nevada and New Jersey regulators, arguing that CFTC-approved event contracts should not be classified as unauthorized wagers.

Sports and business news outlet Front Office Sports has reported that U.S. neobroker Robinhood (NASDAQ:HOOD) has removed its NCAA Tournament prediction markets offering in New Jersey. This move follows mounting regulatory pressure, including a cease-and-desist letter from state gaming regulators.

Earlier this month, Robinhood had ventured into what effectively amounts to full-fledged sports betting. KalshiEX LLC, a Commodity Futures Trading Commission (CFTC)-regulated exchange, facilitated this through event contracts. The inaugural product focused on betting markets for the annual “March Madness” U.S. College Basketball championship—one of the most heavily wagered events in the sports world.

This development came after a previous attempt by Robinhood earlier in the year to offer a Super Bowl event contract, which was also withdrawn shortly after launch due to regulatory concerns.

According to Front Office Sports, the New Jersey Division of Gaming Enforcement sent a cease-and-desist letter to both Robinhood and Kalshi last week, asserting that they were “listing unauthorized sports wagers.”

Robinhood Halts NCAA Prediction Markets in New Jersey

In response, a Robinhood spokesperson stated:

“The CFTC federally regulates event contracts that Robinhood Derivatives offers and provides through CFTC-registered entities, ensuring retail customers can safely access these prediction markets. 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 contracts.”

Following this, Kalshi announced that it had filed lawsuits in the U.S. Federal Court against both the Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement. Kalshi’s founder, Tarek Mansour, issued a statement emphasizing:

“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 dispute between Kalshi and state gaming regulators—especially in Nevada and New Jersey, where casino industries are well-established—centers around whether sports gambling should be governed by federal or state law. A broader question also looms: should sports betting “event contracts” issued by a CFTC-regulated exchange like Kalshi be subject to the same rules and fees as traditional, state-sanctioned gambling venues? Notably, sports betting is legal in 39 out of the 50 U.S. states, further complicating the jurisdictional debate.

As the legal battle unfolds, regulators could set a precedent for sports betting regulation in the U.S., determining whether financial trading platforms like Robinhood can integrate prediction markets within state and federal law.

Visit Stock Broker Chooser’s website for more detailed reviews and insights into leading brokers in the industry. Users will also find comprehensive Reviews and information on the Best Brokers available.