TLDR
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Robinhood stock closed at $117.38 on Sept. 16, up 2.22%, before pre-market dipped slightly to $116.85.
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The company filed a lawsuit against Massachusetts AG Andrea Joy Campbell and the Gaming Commission.
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Robinhood argues the state’s actions violate the Commodity Exchange Act and U.S. constitutional law.
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The case stems from Kalshi’s sports contracts, which Massachusetts deems illegal gambling.
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Robinhood’s legal move seeks to prevent reputational damage and disruption to its operations.
Robinhood Markets, Inc. (NASDAQ: HOOD) closed at $117.38 on September 16, 2025, rising 2.22%, with pre-market trading at $116.85.
Robinhood Markets, Inc. (HOOD)
On September 15, the company filed a lawsuit against Massachusetts Attorney General Andrea Joy Campbell and the Massachusetts Gaming Commission (MGC) in the U.S. District Court. Robinhood is seeking an injunction to stop the state from interfering with its operations related to sports contracts.
The filing comes just days after Campbell sued Robinhood’s partner Kalshi, accusing it of facilitating illegal gambling through sports contracts.
The Legal Argument
Robinhood argues that Massachusetts’s actions conflict with federal law, specifically the Commodity Exchange Act (CEA). The lawsuit claims that state regulators are attempting to override federal authority, which Robinhood asserts violates the U.S. Constitution’s Supremacy Clause.
By targeting the AG and five MGC commissioners, Robinhood hopes to secure court protection that would prevent Massachusetts from extending Kalshi’s case to its platform.
Clarifying Robinhood’s Role
The company stressed in its filing that while Robinhood customers access sports-related event contracts through its app, the actual trades occur on Kalshi’s CFTC-regulated exchange. Robinhood’s role is limited to facilitating the placement and liquidation of orders as a licensed futures commission merchant (FCM).
“This structure means Robinhood is not directly running the market,” the company argued, noting it merely provides the user interface while Kalshi oversees execution and compliance.
No Choice but to Sue
Robinhood stated that it had “no choice” but to file the lawsuit, citing the risk of sudden penalties and reputational harm if Massachusetts pursued enforcement. The company warned that users could lose access to sports contract trading without judicial relief.
Legal experts note Robinhood’s move to federal court could help it sidestep stricter state-level scrutiny. Gaming lawyer Daniel Wallach described the move as “forum-shopping” to avoid a tougher preemption analysis.
Ongoing Regulatory Pressure
Massachusetts regulators argue that Kalshi’s sports contracts function like sports betting, requiring proper licensing. Campbell emphasized the risks of addiction and financial loss, warning that any operator in the sector must comply with state law.
Kalshi and Robinhood face related lawsuits in states including New Jersey, Nevada, and California. Kalshi has already received cease-and-desist orders in at least five jurisdictions.
Stock Performance Overview
Despite ongoing legal battles, Robinhood has delivered massive gains. As of September 16, the stock shows a 215.03% year-to-date return and an astonishing 428.50% one-year gain. Over three years, the stock surged 1,045.17%, and over five years, 208.89%, easily outpacing the S&P 500.
