Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 7 of 28 PageID: 7
21. On March 17, 2025, Robinhood launched its prediction markets hub, through which its customers can place event contract trade orders. 1 Robinhood intermediates its customers’ event contract trades, including sports-related event contract trades, on Kalshi’s exchange. Robinhood has entered into agreements with Kalshi that allow it to access Kalshi’s contract market facilities for this purpose. 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. 22. 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. 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. C. The Commodity Exchange Act and the Commodity Futures Trading Commission 23. Since the 1930s, futures contracts have been regulated by the federal government. In 1936, Congress passed the Commodity Exchange Act (“CEA”), which provided for federal regulation of all commodity futures trading activities and required that all futures and commodity options be traded on organized, regulated exchanges.
1 Robinhood began offering some limited event contract trading starting in October 2024, prior to the launch of the prediction markets hub. The only event contracts Robinhood offered in 2024 were related to the outcome of the U.S. presidential election; those contracts were not traded on Kalshi’s exchange.
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