- The New Jersey Division of Gaming Enforcement has levied two cease-and-desist letters against Robinhood, Kalshi for their sports event contracts
- The division has ordered the companies to cease all operation by midnight tonight
- Dustin Gouker’s The Closing Line was the first to report the news
Another state is taking a swing at Robinhood and Kalshi.
The New Jersey Division of Gaming Enforcement has levied cease-and-desist orders to both Kalshi and Robinhood for their sports event contracts in the state. The division is giving the two companies until midnight tonight to cease offering the contracts in the Garden State.
Dustin Gouker’s The Closing Line was the first to report the news.
Event Contracts Equated to Illegal Sports Betting
According to the cease-and-desist orders, the division of gaming enforcement determined the event contracts are “unauthorized sports wagers for individuals located within the State of New Jersey.
“This activity constitutes a violation of the New Jersey Sports Wagering Act, which only permits licensed entities to offer sports wagering to patrons located in New Jersey,” Mary Jo Flaherty, interim director of the New Jersey Division of Gaming Enforcement, wrote in the letters.
Flaherty ordered both companies to confirm in writing by Friday, March 28, no later than 11:59 p.m. that they have ceased all sports wagering activities targeting New Jersey residents and have voided all wagers placed in the state.
If the companies do not comply, the Division of Gaming Enforcement noted it may take further enforcement action, which includes any and all measures available under state law.
Gouker noted on social media that Robinhood has agreed to cease its sport event contract offerings in New Jersey, but has not yet heard from Kalshi.
States Taking Action Against Sport Event Contracts
New Jersey is the second state this week to take action against the companies. Reuters recently reported Massachusetts Secretary of State Bill Galvin has instituted an investigation into Robinhood’s sports event contract offerings in the state.
His office sent the company a subpoena seeking information on their offerings. He described the company as one good at offering “gimmicks” to keep customers them from investing in sound practices.
Additionally, the Nevada Gaming Control Board was the first state commission to order Kalshi to cease its sports event contracts in the state. The NGCB believes Kalshi is violating numerous Nevada Revised Statutes and Nevada Gaming Commission Regulations by offering the sports event contracts.
According to the order, Kalshi’s event-based contracts for sports and elections is “unlawful in Nevada, unless and until approved as licensed gaming by the Nevada Gaming Commission.”
Additionally, the board informed Kalshi that even licensed sports pools in the state are prohibited from accepting wagers on elections.
“Every sports pool in Nevada must undergo an extensive investigation prior to licensing, must adhere to strict regulation once licensed, and must pay all applicable taxes and fees,” NGCB Chairman Kirk Hendrick said in a press release. “Any unlawful attempts to circumvent Nevada’s right to regulate gaming activity within its borders will be met with the full force of criminal and civil penalties.”
However, the NGCB agreed on Friday, March 14, to provide Kalshi with more time to make a decision.
The NGCB posted the following statement to its social media channels on the deadline:
“Regarding the cease and desist order sent to KalshiEX LLC, dba Kalshi, on March 4, 2025, the Nevada Gaming Control Board was recently contacted by outside counsel representing Kalshi. The company’s counsel requested, and the NGCB did not object to, a limited period of additional time for Kalshi to address the NGCB’s order. Further details will be provided when available.”
The state of New Jersey has recently issued a cease contracts order to popular trading app Robinhood and prediction market platform Kalshi for their involvement in offering bets on sports events. The move comes as part of the state’s efforts to crack down on unauthorized gambling activities and protect consumers from potential harm.
The New Jersey Division of Gaming Enforcement (DGE) has taken action against Robinhood and Kalshi for allowing users to place bets on various sports events without the necessary licenses or approvals. Both companies have been ordered to immediately cease offering these services to residents of New Jersey and to refund any bets placed on sports events.
The DGE has stated that it is illegal for companies to offer betting services on sports events without the proper authorization from the state. This is in line with New Jersey’s strict regulations on gambling, which are designed to ensure that all betting activities are conducted in a safe and fair manner.
In response to the cease contracts order, both Robinhood and Kalshi have stated that they are cooperating with the authorities and are working to resolve the issue. They have also emphasized their commitment to complying with all relevant laws and regulations in order to protect their users and maintain a positive relationship with regulators.
This latest development serves as a reminder of the importance of conducting due diligence when engaging in any form of online betting or trading. Consumers should always be cautious when using platforms that offer betting services, especially if they are not licensed or regulated by the appropriate authorities.
In conclusion, the cease contracts order issued to Robinhood and Kalshi by New Jersey authorities underscores the state’s commitment to enforcing its gambling regulations and protecting consumers from potential harm. It is essential for companies operating in this space to adhere to all relevant laws and regulations in order to ensure a safe and fair gaming environment for all users.