Robinhood Derivatives filed a federal lawsuit yesterday (Monday) seeking to block Massachusetts regulators from enforcing state gambling laws against its sports prediction market operations, jumping into a broader legal fight over who controls event-based trading platforms.

According to Bloomberg Law, the trading subsidiary of Robinhood Markets (NASDAQ: HOOD) sued Massachusetts Attorney General Andrea Joy Campbell and five Gaming Commission officials in federal court, arguing the state lacks authority to regulate its $1 billion quarterly trading volume in sports-related event contracts.

Robinhood’s legal challenge comes three days after Campbell sued prediction market platform Kalshi for allegedly operating an unlicensed sports betting service in the state. The company offers customers access to sports event contracts through a partnership with Kalshi, which operates under federal oversight by the Commodity Futures Trading Commission (CFTC).

“Sports wagering comes with significant risk of addiction and financial loss and must be strictly regulated to mitigate public health consequences,” said AG Campbell. “This lawsuit will ensure that if Kalshi wants to be in the sports gaming business in Massachusetts, they must obtain a license and follow our laws. I am grateful for the ongoing partnership with the Gaming Commission.” 

The lawsuit represents the latest escalation in a nationwide dispute over whether states can regulate federally approved prediction markets. Federal courts in Nevada and New Jersey have ruled in favor of platforms like Kalshi, while a Maryland judge recently sided with state regulators.