Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 6 of 28 PageID: 6
18. Traders may use event contracts to mitigate risk ( e.g. , an orange grower may buy a contract predicting an early frost to offset the risk of loss of income from frost damage) or simply to seek a financial return. B. Robinhood Makes Available Certain Kalshi Event Contracts 19. The companies within the Robinhood organization are financial-services companies that are democratizing finance by removing barriers to access to financial markets, including by offering zero-commission stock trading and easy-to-use mobile and web applications. With their commitment to offering low fees, an intuitive mobile experience and powerful tools, the Robinhood companies empower everyday investors to navigate financial markets safely and efficiently. Robinhood is registered with the Commodity Futures Trading Commission (“CFTC”) as a futures commission merchant (“FCM”), which is an entity that solicits or accepts orders to buy or sell futures and swaps and accepts payment from customers to support such orders. See National Futures Association, Futures Commission Merchant (FCM) Members, available at https://www.nfa.futures.org/members/fcm/index.html. 20. Kalshi is a CFTC-designated contract market. See infra ¶¶ 25-26. Kalshi offers many types of event contracts relating to a variety of areas including climate, technology, health, cryptocurrencies, popular culture, economics and, as relevant here, event contracts relating to the outcome of sporting events. Kalshi self-certified that its sports-related event contracts comply with the CEA’s requirements and began listing them on January 24, 2025. Because the CFTC declined to review or prohibit Kalshi’s sports-related contracts, they were deemed approved by the CFTC, became effective and are legal under federal law. See infra ¶¶ 27-29.
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