A New Jersey regulator has ordered Kalshi and Robinhood to cease providing prediction markets based mostly on sporting occasions to New Jersey locals.
Robinhood partnered with Kalshi earlier this month to launch a prediction market centered on March Insanity, the NCAA basketball event.
In a cease-and-desist-order dated Thursday, which was seen by Decrypt, the New Jersey Division of Gaming Enforcement alleged the buying and selling platforms have illegally provided sports activities wagering companies in The Backyard State. The regulator known as for each firms to cease permitting New Jersey residents to put bets on athletics occasions and void current sports-related wagers from folks dwelling there.
Robinhood and Kalshi should adjust to the order by the top of March 28 or face enforcement actions, in accordance with the letter.
“This letter shall function official discover that Robinhood [and Kalshi], by facilitating and/or accepting unauthorized sports activities wagering from people inside the State of New Jersey, is partaking in exercise that’s illegal underneath not solely New Jersey legislation, however New Jersey’s Structure,” NJGDE Interim Director Mary Jo Flaherty stated within the letter.
The state regulator added that the buying and selling platforms’ actions violate the New Jersey Sports activities Wagering Act, which “solely permits licensed entities to supply sports activities wagering to patrons situated in New Jersey.”
Almost two weeks in the past, Robinhood launched its March Insanity prediction markets powered by Kalshi to capitalize on merchants’ rising appetites for sports activities betting. Authorized sports activities wagers exceeded $140 billion in 2024, up roughly 23% from the 12 months prior, CBS Sports activities reported.
Nonetheless, prediction market operators similar to Kalshi have encountered a number of regulatory obstacles as they goal to handle that rising market.
Earlier this month, Kalshi acquired orders from regulators in Nevada to cease providing derivatives buying and selling on skilled and faculty athletics occasions within the state. And this week, Barrons reported Washington state regulators are contemplating issuing Kalshi the same directive.
“Occasion contracts provided by Robinhood Derivatives are federally regulated by the CFTC and provided via CFTC-registered entities, assuring that retail clients can entry these prediction markets in a protected and controlled method,” Robinhood stated via a spokesperson. “Whereas we don’t consider these contracts run afoul of any state legal guidelines, we’re now not permitting New Jersey residents to enter new positions for the Males’s and Ladies’s Basketball Match occasion contacts.”
A Kalshi spokesperson instructed Decrypt that the corporate would possibly remark later.
Edited by James Rubin
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