Robinhood sues Missouri as Kentucky sues Kalshi, Robinhood, and Coinbase over sports event contracts
Kentucky sued Kalshi, Robinhood, and Coinbase on November 10, alleging unlicensed sports betting and seeking triple damages under the state's Loss Recovery Act. Robinhood separately sued Missouri in federal court to block a cease-and-desist notice on its event contracts, citing the Third Circuit's Kalshi ruling. OG.com also sued Arkansas. The filings add to pending federal appeals over whether sports event contracts are permissible under federal commodity regulations or illegal state gambling.
Robinhood's Missouri lawsuit shifts the company from compliance retreat to active counter-litigation, a reversal that steepens costs for every platform calculating whether to settle or fight. Kentucky's triple-damage demand under its Loss Recovery Act raises the financial exposure beyond cease-and-desist orders into territory where insurers and boards must price existential risk. The state suits already strip Kalshi's federal preemption shield in Ohio and Tennessee, and Robinhood's own federal filing shows even confident platforms no longer trust CFTC registration alone.
Coinbase, rarely targeted alongside prediction-native firms, now faces gambling characterizations that its exchange licensing was never built to absorb. Each new state weaponizes a different statute — recovery acts, consumer protection, criminal summons — forcing platforms to scatter legal resources across doctrines rather than converge on one federal defense. The first platform to lose on a Loss Recovery theory will see that template photocopied by attorneys general nationwide.
Robinhood's Missouri suit joins Polymarket US and Robinhood's parallel Arkansas fight and the Arkansas attorney general's Kalshi action in a widening state-level assault on the federal preemption that CFTC-registered platforms have relied upon.