Robinhood Markets filed a preemptive federal suit against Washington state to block enforcement of gambling laws that could shut down its prediction market trading. The move follows a recent lawsuit by the state against Kalshi and aims to protect the company’s federally regulated event contracts.

Washington’s attorney general and gambling commission have taken a broad stance that all event contracts, from sports to elections to measles case counts, constitute illegal gambling. The suit was filed March 30 in U.S. District Court in Tacoma, citing federal law that preempts state statutes for contracts traded on exchanges overseen by the Commodity Futures Trading Commission.

The complaint, brought by Robinhood Derivatives, a Chicago‑based subsidiary, notes that the company offers event contracts on the Kalshi and ForecastEx exchanges and plans to launch trading on a third exchange, Rothera, later this year. The lawsuit references a December warning from the state gambling commission that prediction markets are “unauthorized” and the fact that Kalshi is fighting more than 20 civil lawsuits.

Washington Attorney General Nick Brown described Kalshi as “just a bookie with a fancy name, and a huge amount of venture capital behind them.” A Robinhood spokesperson said the firm “believes in the power of prediction markets and the important role they play at the intersection of trading, news, economics, politics, culture, and sports.” The company also noted it had “no choice but to file this lawsuit to protect its customers and its business.”

If the court sides with Robinhood, it could reinforce federal preemption over state gambling statutes for prediction markets, potentially easing regulatory uncertainty for firms offering event contracts nationwide. The outcome will likely influence how other states approach enforcement against federally regulated trading platforms.