Case 1:25-cv-14723 Document 10-1 Filed 08/19/25 Page 8 of 34 PageID: 80
PRELIMINARY STATEMENT
The Robinhood organization consists of various financial-services companies that are
democratizing finance by removing barriers to access to financial markets. Robinhood
Derivatives, LLC (“Robinhood”), one of the family of companies within the Robinhood
organization, is a Commodity Futures Trading Commission (“CFTC”)-registered futures
commission merchant (“FCM”) that offers its approved users the opportunity to trade, among
other things, sports-related event contracts through the Robinhood platform. While Robinhood,
as a registered FCM, facilitates the placement and liquidation of event contracts for its users, the
contracts themselves trade on KalshiEx LLC’s (“Kalshi”) exchange, which is registered with the
CFTC as a designated contract market (“DCM”). Thus, while Robinhood’s approved users
access event contracts trading through Robinhood’s platform, all actual trades occur on Kalshi’s
CFTC-regulated exchange.
On March 27, 2025, the New Jersey Division of Gaming Enforcement (“Division”) sent
Kalshi a cease-and-desist letter threatening to prohibit Kalshi from facilitating any trading of
sports-related event contracts in New Jersey. KalshiEx LLC v. Flaherty , No. 25-cv-2152, ECF
No. 1-1, at 1 (D.N.J. filed Mar. 29, 2025). The Division asserted that New Jersey state gambling
laws governed these transactions. In response, Kalshi sought declaratory and injunctive relief
from this Court, arguing that New Jersey’s gambling laws, as applied to trading on a CFTC-
designated exchange, are preempted by the Commodity Exchange Act’s (“CEA”) comprehensive
federal framework for regulating commodity futures and swaps trading. Id. , ECF No. 1. The
Court granted Kalshi’s motions for a temporary restraining order and preliminary injunction,
holding that Kalshi demonstrated a likelihood of success on the merits, that it will likely suffer
irreparable harm without relief, and that the balance of interests favors injunction. KalshiEx LLC
v. Flaherty , No. 25-cv-2152, 2025 WL 1218313, at *3-8 (D.N.J. Apr. 28, 2025) (hereinafter
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