Robinhood's Missouri lawsuit splits from Kalshi's preemption playbook

Scott Bright made 253 transfers from his checking account to Kalshi between June and August of this year. By the time he stopped, he had moved more than $315,000 onto the platform and lost all but $983 of it. His lawsuit, filed in King County Superior Court in Washington, argues that every one of those transfers was illegal under a state ban that has been on the books since 2006. Kalshi's response — that the money went to counterparties, not to Kalshi — is accurate as far as it goes, and it doesn't go very far in a jurisdiction where the recovery statute reaches the operator regardless.

Bright's case is not the most consequential piece of litigation in this space, but it illustrates the shape of the problem facing platforms that have been aggressive about user acquisition in states where their legal standing is contested. Washington's attorney general had already sued Kalshi before Bright placed his first transfer. He kept going anyway. Courts in recovery-statute states don't typically require plaintiffs to show they were deceived, only that the underlying activity was unlawful.

Meanwhile, Robinhood filed its own lawsuit against Missouri and Attorney General Catherine Hanaway in the Eastern District of Missouri, seeking a temporary restraining order and preliminary injunction to block enforcement of a cease-and-desist letter issued in September. Polymarket filed separately in the same state, and the two cases are worth reading side by side because they are not making the same argument.

Robinhood's complaint leans on the Commodity Exchange Act and the CFTC's exclusive jurisdiction over designated contract markets. The structure of that argument follows Kalshi's template closely: federal designation preempts state gaming law under the Supremacy Clause, and compliance with Missouri's licensing requirements would be incompatible with the conditions of federal registration. Kalshi has already won preliminary relief in New Jersey on substantially similar grounds, so the argument has at least one favorable precedent behind it.

Polymarket's separate action reportedly cites the Commerce Clause rather than the CFTC's authority. That is a meaningfully different theory, and not a stronger one in this context. Commerce Clause challenges to state economic regulation face a high burden, and Missouri can plausibly argue it is regulating gambling within its borders rather than discriminating against interstate commerce. If Polymarket's US entity lacks the same federal exchange designation that Robinhood and Kalshi hold, the CEA preemption argument may simply not be available to it, which would explain the different framing.

The reporting confirms that Missouri issued cease-and-desist letters to multiple platforms in September and that Robinhood's complaint treats those letters as the triggering enforcement action. What the reporting doesn't resolve is whether Missouri has taken any step beyond those letters, or whether the state intends to pursue criminal referrals as Utah has done. That gap matters enormously for how courts will assess the immediacy of the threat when deciding whether to grant preliminary relief.

The underlying preemption question is headed toward a federal hearing in Utah on November 20, and the Missouri and Washington cases will develop in its shadow. What the Missouri litigation has now made clear is that the CFTC's exchange designation is functioning as a franchise — the platforms that hold it are filing nearly identical federal preemption suits, and those that don't hold it are reaching for different constitutional theories that have a weaker track record against state gaming enforcement.