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Popular trading app Robinhood has introduced a prediction markets hub in its app, allowing users to trade on event outcomes, including the expected upper limit of the Federal Reserve funds rate in May.
The move follows a surge in event contract popularity, particularly since the U.S. presidential election. The company joins a growing list of brokers, including Interactive Brokers, looking to tap into this expanding market.
Robinhood first entered the sector in October with event contracts tied to the U.S. presidential election, which quickly gained traction. However, the rise of event contracts sparked debate, with some traders embracing them as a financial tool while critics compare them to gambling.
In February, Robinhood faced regulatory hurdles when it pulled Super Bowl-related event contracts just a day after launch following a request from the U.S. Commodity Futures Trading Commission (CFTC). The company said it remains in discussions with the CFTC and plans to work with regulators to ensure compliance.
The move followed reports that the CFTC is also investigating Crypto.com and Kalshi over their Super Bowl event contracts and whether they comply with derivatives regulations. Unlike traditional sports betting, event contracts operate as markets where odds are determined by user participation rather than bookmakers.
The initiative may not immediately impact traditional sportsbooks’ Super Bowl betting handle. But with Robinhood’s 24 million users—including 11 million monthly active accounts— it could be a game-changer in the long term if the offering expanded to include point spreads, player props, and parlays.
“We’re excited to offer our customers a new way to participate in prediction markets and look forward to doing so in compliance with existing regulations,” said JB Mackenzie, VP and GM of futures and international at Robinhood.
The new hub, which goes live Monday, will initially allow bets on the federal funds rate and March Madness college basketball tournaments.
Robinhood says prediction markets serve an important role at the intersection of news, economics, politics, sports, and culture. The company sees them as tools for businesses and investors to hedge against uncertainty.
The launch of political betting followed Kalshi’s court victory against the CFTC, which allowed it to offer election-related event contracts to U.S. users. However, the CFTC’s attorneys argued that the judge overseeing the case had “erred” by ignoring key definitions under the Commodity Exchange Act.
Kalshi also faces another battle as the CFTC considers a new rule that could ban regulated entities from offering contracts on political contests due to concerns over election integrity.
