Case 1:25-cv-14723 Document 10-1 Filed 08/19/25 Page 16 of 34 PageID: 88
customers’ event contract trades, including sports-related event contract trades, on Kalshi’s
exchange. Id. ¶ 5. Robinhood has entered into agreements with Kalshi that allow it to access
Kalshi’s contract market facilities for this purpose. Id. ¶ 6. Those agreements obligate
Robinhood to ensure such access is secure and in compliance with all applicable laws, including
the CEA and CFTC regulations; they also require Robinhood to comply with Kalshi’s rules. Id.
This means that while Robinhood customers are placing orders for event contract trades
in their Robinhood accounts, the trades themselves are taking place on Kalshi’s CFTC-
designated exchange. Id. ¶ 5. This is no different from when a Kalshi customer places an order
for an event contract trade through her Kalshi account, which is then executed on Kalshi’s
exchange. Here, the user interface is Robinhood’s instead of Kalshi’s, which is convenient for
Robinhood customers but does not affect the way in which trades are executed on Kalshi’s
exchange or regulated by the CFTC; it merely adds additional CFTC regulation of Robinhood’s
activities as an FCM. Id.
D.
The Cease-and-Desist Letters
On March 27, 2025, the Division sent Kalshi a cease-and-desist letter threatening to bring
a legal action to prohibit Kalshi from any trading of sports-related event contracts in New Jersey.
KalshiEx , No. 25-cv-2152, ECF No. 1-1, at 1. The Division asserted that Kalshi was “listing
unauthorized sports wagers for individuals located within the State of New Jersey” without a
license, in violation of the New Jersey Sports Wagering Act, N.J.S.A. § 5:12A-11. Id. It further
asserted that Kalshi was “offering unauthorized sports wagering to New Jersey residents on
collegiate sporting events occurring in New Jersey in violation of the New Jersey Constitution,”
Robinhood offered in 2024 were related to the outcome of the U.S. presidential election; those contracts were not traded on Kalshi’s exchange. Id.
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