News: New Jersey Sends Cease-And-Desist Letters To Kalshi, Robinhood
The NJ Division of Gaming Enforcement claims both platforms are offering "unauthorized sports wagering," sets Friday deadline for compliance.
The New Jersey Division of Gaming Enforcement has issued cease-and-desist letters to both the prediction markets platform Kalshi and financial platform Robinhood, The Closing Line confirmed Thursday afternoon.
The NJDGE alleges that both platforms are offering unauthorized sports wagering in the state.
Other information from the letter:
DGE is asking for all wagers placed by New Jersey residents to be voided.
The letter specifically mentions that Kalshi is violating the NJ law that bans betting on college teams that are from New Jersey or athletic events held in the state. The East Regional of the men’s college basketball tournament is taking place in Newark.
DGE asked for confirmation in writing by midnight on Friday that both platforms have stopped offering sports wagering in the state.
Legal action was threatened if either entity did not comply.
A Kalshi spokesperson offered the following statement on the letter:
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 C&D comes after Kalshi launched the equivalent of single-game betting markets on March Madness, aka the men’s and women’s college basketball tournaments, in all 50 states. The markets are not “against the house” but are offered via an exchange.
Kalshi also announced a partnership with Robinhood to offer “sports event trading” on March Madness last week. Kalshi first started offering futures markets on various sporting events, including the Super Bowl, earlier this year.
The Closing Line obtained copies of both letters. Below is the text of the letter sent to Kalshi CEO Tarek Mansour. A similar letter was sent to Robinhood CEO Vlad Tenev.
CEASE AND DESIST
Via certified, regular, and electronic mail
Tarek Mansour, CEO
Kalshi Inc. d/b/a Kalshi
594 Broadway, Suite 407
New York, NY 10012
<email redacted>
Re: Unauthorized Sports Wagering in New Jersey
Dear Tarek Mansour:
The New Jersey Division of Gaming Enforcement (“Division”) is a law enforcement agency within the Office of the Attorney General, charged with the responsibility to investigate and prosecute violations of the New Jersey Casino Control Act, N.J.S.A. 5:12-1 et seq, and the New Jersey Sports Wagering Act, N.J.S.A. 5:12A-10 et seq.
The Division has accessed your mobile application and website, located at www.kalshi.com, and it has determined that your company, Kalshi Inc. d/b/a KalshiEX LLC and/or Kalshi (“Kalshi”), is listing unauthorized sports wagers for individuals located within the State of New Jersey. This activity constitutes a violation of the New Jersey Sports Wagering Act, which only permits licensed entities to offer sports wagering to patrons located in New Jersey. See generally N.J.S.A. 5:12A-11. Further, Kalshi is currently offering unauthorized sports wagering to New Jersey residents on collegiate sporting events occurring in New Jersey in violation of the New Jersey Constitution. See N.J. Const. Art. IV, §7, ¶2(D). That constitutional provision mandates that “wagering shall not be permitted on a college sport or athletic event that takes place in New Jersey or on a sport or athletic event in which any New Jersey college team participates regardless of where the event takes place.”
This letter shall serve as official notice that Kalshi, by facilitating and/or accepting unauthorized sports wagering from individuals within the State of New Jersey, is engaging in activity that is unlawful under not only New Jersey law, but New Jersey’s Constitution. The Division demands that you immediately cease and desist from offering any form of sports wagering to New Jersey residents and void any such wagers already placed.
The Division reserves the right to pursue any appropriate sanctions if you fail to take immediate corrective action as demanded herein. Please confirm in writing by Friday, March 28, 2025, by no later than 11:59 pm, that you have ceased all sports wagering activities targeting New Jersey residents and voided all such wagers placed in New Jersey. Failure to comply with this directive will result in the Division taking further enforcement actions, which may include any measures available under New Jersey law.
Sincerely,
Mary Jo Flaherty
Interim Director
New Jersey Division of Gaming Enforcement
Kalshi faces a similar cease-and-desist order in Nevada, where no action to enforce it has been taken, and Kalshi has not yet publicly responded. Robinhood also faces an investigation from the top securities regulator in Massachusetts.
Ifrah Law has been at the center of advancing iGaming in the U.S., shaping groundbreaking legislation, leading precedent-setting cases, and guiding clients that span the iGaming ecosystem through every phase of their business journey. Learn more at IfrahLaw.com.
Gambling news roundup
My latest newsletter rounding up prediction markets news:
Multiple Sweepstake Operators Exiting New York Come April (Sweepsy): “Following Senate Bill S9226, which seeks to ban online sweepstakes casinos in the state explicitly, companies like Hello Millions, SportsMillions, PlayFame, SpinBlitz, and now Rolling Riches have begun winding down their services for New York residents. In emails shared across Reddit today, users reported receiving nearly identical notices from multiple platforms, each outlining a phased exit strategy culminating in full account closures by late April.”
This seems to stem from recent comments from the chair of the New York State Gaming Commission, which appears to be preparing to oust sweepstakes operators, whether the state legislature bans them or not.
The Social and Promotional Games Association “announced that its members are adjusting their approach,” which is a pretty useless bit of information without more context about what they are doing.
PropSwap Signs Partnership with Bally Bet (press release): “PropSwap announced today that Bally Bet is signing on as an official multi-property sportsbook partner of America's largest secondary market for sports bets. The partnership will kick off today, Thursday March 27th, just in time for the round of 16 teams in both men's and women's college basketball. PropSwap and two Bally Bet sportsbooks in Mississippi – at the Hard Rock Hotel and Casino Biloxi and Bally's Vicksburg – will combine efforts to help gamblers find new ways to wager on the sports they love.”
If you read to the end, you’ll find out I am now an advisor to Prop Swap, and I am excited to help them on their journey in the regulated sports betting space. I wrote about Prop Swap years ago at Legal Sports Report, and it’s exciting to see founder Luke Pergande ink a deal with a sportsbook in a state with legal sports betting. I am not just a newsletter publisher…I am a consultant! More here if you are interested in how I might be able to help.
Is federal intervention in sports betting coming? (Straight to the Point): “Threats of federal intervention are being taken far more seriously than they were just a few months ago. Congressional action is an alarm STTP has been sounding for several years, and others are now doing the same, including Eilers & Krejcik Gaming (a newsletter sponsor) and Regulus Partners, both of whom have talked about federal intervention in recent months.”
I’ve been bearish on the idea that we’re going to see a federal framework for sports betting emanating from Congress. But I am less bearish now with the rise of nationwide sports betting via Kalshi and now Robinhood. The Commodity Futures Trading Commission is involved already, so in reality the feds are already in the sports betting business. The impetus to have lobbying in favor of federal regulation has been largely non-existent outside of a few Congressmembers wanting to be mad about legal sports betting. If there’s no mechanism that succeeds in shutting down or slowing sports betting via prediction markets (ie the CFTC itself, a federal or state court case, etc.), then you could easily see a coalition that coalesces around a federal framework that brings everything under the same umbrella, somehow. There’s still a huge delta between what has been proposed (the SAFE Bet Act) and what sports betting stakeholders want from legislation. And it’s still tough to do anything in Congress. But I can squint and see how this could happen in the future.
Alberta sets stage to regulate private online gambling companies (CBC): “The Alberta government is preparing to open the province's online gambling market to private companies like Bet365 in a bid to regulate more of the industry and capture revenue currently headed elsewhere. Up until now, the Alberta Gaming, Liquor and Cannabis Commission (AGLC)-run Play Alberta was the only regulated online gambling website in Alberta. But players could still gamble on the so-called ‘grey market’ — referring to offshore gambling websites like Bet365 and Bodog, that aren't officially licensed by the province but are still accessible to Alberta residents. Proposed legislation tabled today, called the iGaming Alberta Act, would create a new Crown corporation, the Alberta iGaming Corporation, to oversee the new market and put the AGLC in charge of regulation.
While Alberta is relatively small — just over 4 million people — the lack of traction for legalization in the US makes this an attractive target for operators.
Mass. lawmakers propose sweeping new limits on sports gambling (Boston Globe, paywall): “Massachusetts would impose strict new limits on online sports betting and ban sports gambling operators from running advertisements during televised events, under an expansive bill cosponsored by three state Democratic lawmakers. The legislation, called the Bettor Health Act, is designed to rein in the runaway growth of sports betting in Massachusetts and ban industry practices that some public health advocates have described as highly addictive.”
Yeah, this ain’t it. Read all of the stuff I write about the expansion of sports betting in the unregulated space — including how there’s now nationwide sports betting! — before you try to rein in the regulated space artificially.
It speaks to the fact that inside the gambling bubble we’re very aware of Kalshi and the disruption it portends, but even the average policymaker may not have any idea what’s going on.
BetMGM Will Pursue Missouri Sports Betting, But Market Access Partner Unknown (Sports Betting Dime): “A BetMGM spokesperson today confirmed the company’s interest in pursuing entrance into the Missouri sports betting market. However, the sports betting operator has yet to settle on a market access partner. The spokesperson also confirmed that while BetMGM’s deal with the Kansas City Chiefs as an official sports betting partner is still intact, it may not be how the company enters the Missouri sports betting market.”
Gambling newsletters
Closing Line Consulting
Need help with gambling content, navigating the North American gaming industry, communications/PR, or research and analysis? I have a consultancy to help in gaming and beyond. Reach out if you want to have a conversation. Learn more about CLC here.
Want to sponsor The Closing Line?
You can email dustin@closinglineconsulting.com for more information.
Huzzah, finally seeing regulatory action here.