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Robinhood is taking another stab at the growing sports “predictions” space.
The trading platform announced Monday that it was entering a wide-ranging partnership with the Kalshi exchange, which will include money-line markets on this week’s NCAA Tournament games. The news is particularly interesting because the two sides previously had a similar partnership for the Super Bowl, but Robinhood pulled out after pressure from regulators.
It was not immediately clear what changed for Robinhood to make another go at the space.
“We have been in close contact with the CFTC over the past several weeks and look forward to continuing to work with them to promote innovation in the futures, derivatives and crypto markets,” Robinhood said in a statement. “We are committed to enabling anyone, anywhere, to trade, invest or earn on the financial assets that are available to institutions and that our retail customers want. You can read our recent policy paper on prediction markets for more information on our position and support for this emerging asset class.”
The prediction hub will be available directly in Robinhood’s app. Robinhood had 24.8 million customers as of November 2024.
The nascent sports prediction space got kickstarted when Crypto.com, and later Kalshi, launched Super Bowl betting. The Commodity Futures Trading Commission (CFTC) asked Crypto.com to take its market on the NFL championship down pending a regulatory review, but the exchange left it up, citing the incoming presidential administration change. In early February, the CFTC announced that a “public roundtable” would be held in about 45 days relating to the sports-related prediction markets.
There are lingering questions as to whether the regulation of sports event contracts, which allow consumers to bet on a sporting event’s outcome, falls within the federal government’s or individual states’ purview. Earlier this month, Nevada regulators issued a cease-and-desist order to Kalshi. They have since extended the original 10-day deadline after Kalshi retained outside counsel.
MLB recently petitioned the CFTC about making sure prediction markets are subject to the same “integrity” guidelines as traditional sportsbooks like FanDuel and DraftKings.
Sports currently make up a sliver of prediction markets that Kalshi currently offers. The platform is perhaps best known for offering betting on elections, after successfully winning a years-long legal battle with the CFTC for the right to offer the markets. Markets range from when bitcoin will hit $150,000 to the top USA song on Spotify today.
“As we demonstrated during the election, there’s nothing more exciting than participating in prediction markets during unpredictable events,” Kalshi co-founder and CEO Tarek Mansour told Front Office Sports. “March Madness is famous for its volatility; we’re thrilled to add the excitement of prediction markets to this year’s games and couldn’t ask for a better partner in Robinhood to bring our vision to every American.”
