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Robinhood Launches Prediction Markets with March Madness and Fed Rate Bets

The popular trading app is expanding into event-based derivatives, offering users the ability to bet on sports, politics, and economic outcomes through a new in-app hub.

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
Image
Photo: Olivier Douliery / AFP (Getty Images)
Illustration: Natalie Peeples/Axios

Overview

  • Robinhood's new prediction markets hub allows users to wager on outcomes of events like the March Madness tournament and Federal Reserve interest rate decisions.
  • The service is being rolled out in all U.S. states except Nevada, requiring users to have specific account features like margin investing or options trading enabled.
  • The platform's prediction markets are powered by Kalshi, a CFTC-regulated exchange, but Robinhood may explore other partnerships or build its own exchange in the future.
  • Robinhood's move into prediction markets aligns with its strategy to diversify its offerings and cater to growing demand for event-based derivative contracts.
  • The company has faced regulatory challenges in the past, including pulling a Super Bowl betting product, but states it has worked closely with the CFTC to ensure compliance for this launch.