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5mo ago

Massachusetts Investigates Robinhood's Prediction-Markets Hub

The probe examines the legality and ethics of linking event-based betting, including March Madness contracts, 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 regulators issued a subpoena to Robinhood on March 20, seeking information on its prediction-markets hub and its marketing to state residents.
  • The investigation focuses on whether Robinhood's platform improperly blurs the line between investing and gambling, particularly for younger users.
  • Robinhood's prediction-markets hub, launched on March 17, allows users to trade contracts on events like NCAA basketball games and Federal Reserve decisions.
  • The hub operates through Kalshi, a CFTC-regulated exchange, with Robinhood emphasizing its compliance with federal regulations.
  • This marks the latest regulatory challenge for Robinhood, which settled a $7.5 million case in 2024 over gamification practices and a 2021 data breach.