Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 5 of 28 PageID: 5
15. Venue is proper under 28 U.S.C. § 1391(b)(1) and (b)(2). The Individual Defendants reside and perform their duties in this District. The New Jersey Division of Gaming Enforcement has offices in Atlantic City and Trenton. A substantial part of the events giving rise to Robinhood’s claim occurred in this District. RELEVANT FACTS A. Event Contracts 16. An event contract is a type of derivative that allows customers to trade on their predictions about the occurrence of future events. Event contracts are typically structured as binary options posing a particular yes-or-no question. A buyer takes the “yes” side and a seller takes the “no” side, and upon the expiration of the contract—typically, when the outcome of the future event in question becomes known—the value of the contract goes to the party who was right. 17. Until that time, buyers and sellers can trade the contract, and the price of the contract fluctuates based on the market’s assessment of the probability that the event will occur. For example, for an event contract worth $1, if the “yes” position is trading at 17 cents and the “no” position is trading at 83 cents, that implies that the market believes there is a 17% chance the event will occur. If new information becomes available that indicates that the event is more likely to occur, market participants’ trading will change in ways that reflect that new information (for example, more market participants might purchase the “yes” position), which will cause the price of the “yes” position to go up. Thus, the price of an event contract can reveal valuable information about market sentiment concerning the underlying event and can therefore be an important information-gathering tool.
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