Case 1:25-cv-14723 Document 1 Filed 08/19/25 Page 13 of 28 PageID: 13
sports wagering to New Jersey residents and void any such wagers already placed” and reserved the Division’s right to pursue sanctions should Robinhood not comply. Id. at 1. The Division further stated that failure to comply with the cease-and-desist letter by 11:59 pm on March 28, 2025 “will result in the Division taking further enforcement actions, which may include any measures available under New Jersey law.” Id. at 2. Violations of the New Jersey Sports Wagering Act are punishable as “crime[s] of the fourth degree” or by fines of up to $100,000. N.J.S.A. §§ 5:12A-11(c), 2C:43-2. 35. Upon receiving its cease-and-desist letter, Kalshi, arguing that New Jersey law is preempted by the CEA, sought declaratory and injunctive relief from this Court. KalshiEx , No. 25-cv-2152, ECF No. 1. The Court granted Kalshi’s motion for a temporary restraining order and preliminary injunction, holding that Kalshi demonstrated a likelihood of success on the merits, that it will likely suffer irreparable harm without relief, and that the balance of interests favors injunction. KalshiEx , 2025 WL 1218313, at *3-8. The Division has appealed that decision. KalshiEx LLC v. Flaherty , No. 25-1922 (3d Cir. 2025). 36. Robinhood responded to the Division the following day, March 28, 2025, explaining that although Robinhood maintains that its conduct did not violate any state laws, Robinhood had taken certain measures to address the Division’s concerns. On March 27, 2025, Robinhood implemented a “position closing only” restriction on Robinhood accounts with a current New Jersey address, which prevented those accounts, as well as any new Robinhood account with a New Jersey address, from entering new positions for sports-related event contracts. 37. Following the Court’s decision in KalshiEx , No. 25-cv-2152, 2025 WL 1218313, to mitigate the harm that Robinhood has suffered by complying with the
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