Complaint for Permanent Injunction and Declaratory Relief Against All Defendants (Receipt # AWAWDC-9579367) Attorney Kenneth E Payson Added to Party Robinhood Derivatives, LLC Filed by Robinhood Derivatives, LLC. (Attachments: # 1 Exhibits A-H, # 2 Civil Cover Sheet, # 3 Summons Tina Griffin, # 4 Summons Alicia Levy, # 5 Summons Sarah Lawson, # 6 Summons Noah Skartvedt, # 7 Summons Michael Charles, # 8 Summons Nicholas W. Brown)(Payson, Kenneth)

1.

Plaintiff Robinhood Derivatives, LLC (“Robinhood”) is a financial-services

company that offers its approved customers the opportunity to trade, among other things, event COMPLAINT (3:26-cv-5311) - 2

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contracts through the Robinhood platform. Event contracts, including sports-, election-, and entertainment-related event contracts, trade on Commodity Futures Trading Commission (“CFTC”)-designated contract markets, known as “DCMs.” Robinhood is registered with the CFTC as a futures commission merchant (“FCM”). As an FCM, Robinhood facilitates the placement and liquidation of event contracts for its customers, though the contracts themselves trade on registered DCMs, including the DCM of KalshiEx, LLC (“Kalshi”) and ForecastEx, LLC (“ForecastEx”).

2.

Currently, Robinhood only offers event contracts via Kalshi and ForecastEx,

including event contracts relating to sports, politics, entertainment, weather, and other events. Robinhood is actively working to offer event contracts on contract markets beyond Kalshi’s and ForecastEx’s. As soon as June of this year, Robinhood intends to begin offering event contract trading via a DCM—Rothera Exchange and Clearing LLC (“Rothera”)—controlled by a joint venture between Robinhood Markets, Inc. (“Robinhood Markets”), the parent company of Robinhood, and another entity.

3.

On December 9, 2025, Washington’s gaming regulator, the Washington State

Gambling Commission (“WSGC”), issued guidance on event contract markets—also known as prediction markets—which warned that “prediction markets are an unauthorized activity in Washington State” and that “[o]ffering events-based contracts or participating in these markets is not authorized in Washington State.” Press Release, Wash. State Gambling Comm’n, Prediction Markets (Dec. 9, 2025), https://wsgc.wa.gov/news/2025/prediction-markets (Ex. A).

4.

This was not an empty threat. On March 27, 2026, the Washington Attorney

General’s Office (“Washington” or the “State”) filed a civil enforcement action against Kalshi on the theory that all federally regulated event-contract trading violates Washington’s prohibitions against betting and wagering pursuant to RCW §§ 19.86.080, 19.86.140, 43.10.030, 9.46.010, 4.24.070, among others. See generally State v. KalshiEx LLC, No. 26-2-10264-3 (King Cnty. Super. Ct. Mar. 27, 2026) (the “Kalshi Complaint”) (Ex. B). Washington alleges that Kalshi’s federally regulated event contracts violate Washington’s Consumer Protection Act, Gambling Act, COMPLAINT (3:26-cv-5311) - 3

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and Recovery of Money Lost at Gambling Act, and alleges that Kalshi is “offering, operating, conducting, marketing, promoting, and/or distributing unlicensed and Illegal Gambling Activities to Washington consumers.” Id. at ¶¶ 2.1, 3.4. Washington also alleges that “[u]nder longstanding, well‑established, and unambiguous Washington state law, Kalshi’s gambling operation is illegal,” and that “every core feature of Kalshi’s Illegal Gambling Activities—its wagers, fees, and online transmission of gambling information—constitutes illegal online gambling.” Id. ¶¶ 1.1, 4.18. This action demonstrates Washington’s willingness to use state law to attempt to shut down federally authorized markets.

5.

At a press conference announcing the commencement of the Kalshi Action,

Washington Attorney General Brown said that “Kalshi really is just a bookie with a fancy name, and a huge amount of venture capital behind them.” David Gutman, Kalshi ‘Prediction Market’ Violates

WA

Antigambling Laws, AG Says, Seattle Times (Mar. 27, 2026),

https://www.seattletimes.com/seattle-news/politics/kalshi-prediction-market-violates-wa-anti- gambling-laws-ag-says (Ex. C). The Attorney General’s press release announcing the action similarly claimed that “Kalshi attempts to skirt state law by branding its betting platform as a ‘prediction market,’ but whatever Kalshi chooses to call it, Kalshi’s operations clearly fall under the definition of illegal gambling in Washington.” Press Release, Wash. State Off. of the Att’y Gen., Washington Sues Online Betting Platform Kalshi for Illegal Gambling (Mar. 27, 2026), https://www.atg.wa.gov/news/news-releases/washington-sues-online-betting-platform-kalshi- illegal-gambling (Ex. D).

6.

Within the last several months, Washington has also jointly filed amicus briefs with

other states in the Third, Fourth and Ninth Circuits taking the position that states have the authority to prohibit federally authorized event contracts as contrary to state gambling laws. See Brief of Amici Curiae of Nevada, Ohio, 32 Other States, District of Columbia, and Northern Mariana Islands Supporting Appellants, Dkt. 29, KalshiEx LLC v. Flaherty, No. 25-1922 (3d Cir. Jun. 17, 2025) (Ex. E); Brief of Amici Curiae of Nevada, Ohio, 36 Other States, and the District of Columbia Supporting Appellees, Dkt. 41-1, KalshiEx LLC v. Martin, No. 25-1892 (4th Cir. Dec. COMPLAINT (3:26-cv-5311) - 4

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22, 2025) (Ex. F); Brief of Amici Curiae of New Jersey, Ohio, 37 Other States, and the District of Columbia Supporting Appellees, Dkt. 48.1, KalshiEX LLC v. Assad, et al., No. 25-7516 (9th Cir. Jan. 30, 2026) (Ex. G); Brief of Amici Curiae of Ohio, New Jersey, 37 Other States, and the District of Columbia Supporting Appellees, Dkt. 76.1, N. Am. Derivatives Exch., Inc. v. Nevada, Nos. 25- 7187, 25-7516, 25-7831 (9th Cir. Mar. 10, 2026) (Ex. H) Indeed, two of these amicus briefs were filed in this circuit, asserting that “federal law does not preempt States from regulating … events contracts,” Ex. G at 13, and that the CFTC’s assertion of its own exclusive jurisdiction is wrong, see Ex. H at 10-12.

7.

In light of the civil enforcement action Washington commenced against Kalshi,

WSGC’s formal guidance declaring prediction markets “unauthorized” in Washington, and Washington’s multijurisdictional advocacy in support of state regulators in event contract litigation—including as amicus curiae in a Ninth Circuit appeal in which Robinhood is an opposing party—there is a concrete and imminent threat that Washington will file an enforcement action against Robinhood as it did against Kalshi. Robinhood is offering and facilitating event-contract trading to Washington residents in its capacity as a CFTC-regulated FCM, and the enforcement risk against it is particularly acute because Robinhood intermediates many of its users’ event contract trades on Kalshi’s platform.

8.

However, as applied to event contracts on DCMs, Washington law is preempted by

the Commodity Exchange Act’s (“CEA”) comprehensive federal framework for regulating commodity futures, swaps, and options trading.

9.

In light of the State’s enforcement action against a federally regulated DCM, there

is a real and imminent threat that Washington will initiate an enforcement action against Robinhood. As a result, Robinhood now faces an immediate threat of civil prosecution by the State, along with the attendant reputational harm that any enforcement proceeding by the State would cause. Robinhood’s Washington customers would also face abruptly losing access to event contract trading through their Robinhood account and the liquidation of any open positions. COMPLAINT (3:26-cv-5311) - 5

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10.

The resulting harm would be irreparable. Even a meritless state enforcement action

would immediately disrupt Robinhood’s federally authorized operations, fragment a national market, reduce liquidity, jeopardize critical banking and commercial relationships, undermine user trust, harm Washington residents, and force Robinhood to choose between exercising its federal right to operate nationwide or submitting to unlawful state coercion. Such disruption to a nationally uniform market cannot be remedied through damages.

11.

Robinhood therefore had no choice but to file this lawsuit to protect its customers

and its business. Robinhood respectfully requests that this Court enjoin Defendants from enforcing preempted Washington law against Robinhood for its facilitation of transactions involving event contracts on federally regulated DCMs.

12.

Plaintiff Robinhood is a Delaware limited liability company with its principal place

of business in Chicago, Illinois. Robinhood is one of the family of companies within the broader Robinhood organization. The Robinhood companies’ mission is to democratize finance for all by removing barriers to access to financial markets. Robinhood is registered with the CFTC as an

13.

Defendant Tina Griffin is sued in her official capacity as Executive Director of the WSGC.

14.

Defendant Alicia Levy is sued in her official capacity as Chair of the WSGC.

15.

Defendant Sarah Lawson is sued in her official capacity as Vice Chair of the WSGC.

16.

Noah Skartvedt is sued in his official capacity as Commissioner of the WSGC.

17.

Michael Charles is sued in his official capacity as Commissioner of the WSGC.

18.

Defendant Nicholas W. Brown is sued in his official capacity as Attorney General

for the State of Washington.