Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 2 of 28 PageID: 2
office threatening to bring actions to prohibit both entities from offering sports-related event contracts trading in New Jersey. Exhibit 1 (letter to Robinhood); KalshiEx LLC v. Flaherty , No. 25-cv-2152, ECF No. 1-1 (D.N.J. filed Mar. 29, 2025) (letter to Kalshi). The Division asserted that New Jersey state gambling laws governed these transactions and threatened enforcement actions. Exhibit 1, at 1-2. 3. Robinhood maintains that its conduct did not violate any state laws, but nevertheless, Robinhood paused allowing New Jersey residents to enter new positions for sports- related event contracts later that same day. Kalshi took a different approach, filing a lawsuit seeking declaratory and injunctive relief from this Court on the basis that, as applied to trading on its CFTC-designated contract market, New Jersey law is preempted by the Commodity Exchange Act’s (“CEA”) comprehensive federal framework for regulating commodity futures and swaps trading. KalshiEx LLC v. Flaherty , No. 25-cv-2152, ECF No. 1 (D.N.J. filed Mar. 29, 2025). 4. Kalshi has won preliminary relief—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 concerning its argument that New Jersey law is preempted, that it will likely suffer irreparable harm without relief, and that the balance of interests favor injunction. KalshiEx LLC v. Flaherty , No. 25-cv-2152, 2025 WL 1218313, at *3-8 (D.N.J. Apr. 28, 2025) (hereinafter “ KalshiEx ”), appeal filed , No. 25-1922 (3d Cir. May 8, 2025). Kalshi has won similar preliminary relief in Nevada. See KalshiEX, LLC v. Hendrick , No. 25- 00575, 2025 WL 1073495, at *8 (D. Nev. Apr. 9, 2025) (hereinafter “ KalshiEx (D. Nev.) ”) (enjoining Nevada Gaming Control Board, Nevada Gaming Commission and their members
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