Massachusetts Investigates Robinhood Over March Madness Prediction Market

State regulators subpoena Robinhood, seeking user data and marketing materials related to its sports futures trading product launched last week.

Massachusetts Secretary of State Bill Galvin has launched an investigation into Robinhood's prediction markets hub, calling it a 'gimmick' that diverts investors from sound financial practices.
The subpoena demands information about Massachusetts users participating in March Madness futures trading and copies of related marketing materials.
Robinhood's prediction markets hub, powered by CFTC-regulated Kalshi, allows users to trade event contracts on sports and economic outcomes.
Nevada has also taken action, issuing a cease-and-desist letter to Kalshi, highlighting state-level challenges to the platform's compliance.
Robinhood's stock price has surged since the hub's March 17 launch, despite growing scrutiny from state regulators.