Robinhood account holders can bet on the Super Bowl this week, a first for the quick-swipe stock trading app.
Robinhood announced a partnership with prediction market Kalshi Monday that will allow users to bet on the winner of the Eagles and Chiefs with money in their brokerage accounts. The bets will only center on who wins the game outright, as opposed to point spreads or any of the myriad other props around the Super Bowl.
The two parties are being careful to call this “event trading” as opposed to “betting” or “gambling,” though it’s functionally the same thing. Sports betting is regulated at the state level, whereas derivatives trading is federally regulated.
“Robinhood’s mission is to democratize finance for all. With an emerging asset class like event contracts, we recognize an opportunity to better serve our customers as their interests converge across the markets, news, sports, and entertainment,” Robinhood said in a statement. “Available in all 50 states on a regulated exchange, the Pro Football Championship event contract gives eligible customers the power to trade on the outcome of the big game.”
There are people in the traditional sportsbook space who view new products like this as an existential threat. In the immediate term, this partnership will have little impact on the handle (total money bet, which is different from revenue after paying out winners) that shops like FanDuel and DraftKings get for the Super Bowl. In the long run, it could become significant if and when point spreads, player props, and parlays come into the picture on exchange-based trading.
Exchanges can offer substantially lower “vig” because users are betting against each other, with the platforms serving as market-makers. With sportsbooks, gamblers are betting against the house, which has inherent risk in each bet.
Robinhood has about 24 million users, 11 million of which are active on a monthly basis. Kalshi, an exchange where you can bet on everything from the weather to politics, is a relatively new player backed by VC firms including Sequoia, Neo, Y Combinator, and Mantis VC. Donald Trump Jr. was recently named as a strategic advisor to Kalshi.
Last month, Kalshi filed this Super Bowl market with the Commodity Futures Trading Commission (CFTC). This followed a similar filing by Crypto.com. While the CFTC had asked Crypto.com to pause its offering pending a regulatory review, the crypto exchange rebuffed the request and continued to list the market as the governing body was set to flip from majority Democrat to Republican under the Trump administration. The CFTC has thus far not taken any further action on the matter.
