Robinhood Appeal in Massachusetts Gets First Circuit Hearing

The U.S. Court of Appeals for the First Circuit has scheduled oral arguments in Robinhood Derivatives’ appeal of its dismissed case against the Massachusetts attorney general and state gaming regulators, according to CDC Gaming.

That puts the focus, at least for now, on a case that is narrower than the larger prediction-market debate often surrounding it. CDC Gaming described the appeal as a regulatory and jurisdictional challenge over whether sports-event contracts and prediction markets can be regulated by the Massachusetts Gaming Commission.

Robinhood filed the suit seeking declaratory and injunctive relief against the state gaming regulators and the attorney general. The company had asked a federal court to intervene before the dispute moved further.

U.S. District Judge Richard Stearns dismissed the case for lack of jurisdiction and on the merits, which is why Robinhood is now before the First Circuit.

Gaming attorney Daniel Wallach, quoted by CDC Gaming from LinkedIn, said the appeal currently concerns “threshold justiciability questions, not the broader question of whether federal law displaces Massachusetts’ authority to regulate sports event contracts as sports wagering.” He added: “But you never know what might pique the appellate court’s curiosity.”

That is a useful distinction. The scheduled argument does not mean the appeals court is set to resolve the entire fight over who should control these products. On the account in CDC Gaming, the immediate issue is more preliminary: whether this case, in this posture, is one the federal courts should decide.

That may sound procedural, but procedure is often where these disputes either advance or stall. Robinhood tried to get declaratory and injunctive relief against state officials. The district court said no. Now the First Circuit will hear the appeal from there.