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4w ago

Massachusetts Investigates Robinhood's Prediction Markets Hub

State regulators subpoena Robinhood over March Madness betting, citing concerns about gambling behavior linked to brokerage accounts.

The Robinhood application is seen on a smartphone in Hastings-On-Hudson, New York, in January 2021.
Robinhood's prediction market allows users to bet on the outcome of college basketball games, like Gonzaga v Houston during the 2025 NCAA Men's Basketball Tournament in Wichita, Kansas on March 22, 2025 (Photo by Jamie Squire/Getty Images)
Massachusetts Secretary of State William Galvin arrives for the Inauguration of Massachusetts Governor Maura Healey at the Massachusetts State House in Boston, Massachusetts, U.S., January 5, 2023. REUTERS/Brian Snyder/File Photo
The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew Kelly/File Photo

Overview

  • Massachusetts Secretary of State Bill Galvin issued a subpoena to Robinhood on March 20, requesting marketing materials and data on state residents trading event contracts.
  • Robinhood launched its prediction markets hub on March 17, allowing users to bet on events like NCAA basketball games and Federal Reserve decisions.
  • Regulators are scrutinizing the platform for potentially encouraging gambling behavior, particularly among young users, by integrating sports betting into brokerage accounts.
  • Robinhood asserts that its prediction markets hub complies with Commodity Futures Trading Commission (CFTC) regulations and operates through CFTC-registered entities.
  • Despite regulatory scrutiny, Robinhood's stock has risen significantly, reflecting strong investor interest in its new offerings.