The gaming regulator in New Jersey has reportedly sent a cease-and-desist letter to both Kalshi and Robinhood.
The New Jersey Department of Gaming Enforcement alleges that the platforms are offering unauthorized sports wagering in the state.
The matter was first reported by The Closing Line who stated they confirmed the news on Thursday afternoon (March 27) and have obtained the letter.
Kalshi is a financial exchange and prediction market which is based in New York and was founded in 2019. Robinhood is a California-based electronic trading platform that has also just launched a new private banking offering.
The New Jersey Department of Gaming Enforcement is a long-standing government agency that was initially established in 1977. It has oversight of the state’s gaming industry, including sports wagering.
What does the New Jersey letter say to Kalshi and Robinhood?
According to the publisher, the letter states several points including the regulator asking for all wagers placed by residents in the state to be voided. It has asked for confirmation in writing by midnight on Friday that both platforms have stopped offering sports wagering in the state, threatening legal action if either entity didn’t comply.
A spokesperson from Kalshi told The Closing Line: “Kalshi believes in the value of regulation, and operates under the comprehensive oversight of the Commodity Futures Trading Commission. We look forward to engaging with the state of New Jersey to resolve this matter.”
The letter is also reported to include a specific mention that Kalshi is violating the NJ law that bans betting on college teams that are from the state or athletic events held in the state.
The two financial companies have recently announced a partnership as they joined together to offer a prediction markets hub which includes the ongoing March Madness that focuses on college basketball.
During the initial announcement, Robinhood stated online that the hub “will allow customers to trade contracts for what the upper bound of the target fed funds rate will be in May, as well as the upcoming men’s and women’s College Basketball Tournaments.”
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