Robinhood at it again
You can’t keep a high-profile US-based stock trading platform down so it seems.
back to test the federal body’s boundaries
Despite being denied a Super Bowl LIX betting market by the Commodity Futures Trading Commission (CFTC) in February, Robinhood is back to test the federal body’s boundaries after announcing March Madness markets.
The company owned by Bulgarian-American entrepreneur Vlad Tenev announced Monday the launch of a prediction markets hub on the Robinhood app.
The hub, according to Robinhood, will allow customers to trade contracts for multiple events, including this year’s men and women’s NCAA basketball tournaments.
Considering the CFTC’s last-minute intervention to stop Robinhood offering widely publicized Superbowl markets, the big question mark is if Tenev’s March Madness market will pass the Feds’ regulatory muster.
Not Robinhood’s last dance
Robinhood went heavy on marketing event contracts tied to Super Bowl LIX, but the CFTC was quick to instruct the firm to stop offering them to customers a day later. Monday’s announcement means the Super Bowl was not Robinhood’s last sports event dance.
Robinhood’s press release stated that contracts via the new hub including March Madness “will start rolling out today and will be available to all eligible customers in the coming days.”
According to Reuters, however, the US firm stated it has in recent weeks been in contact with the CFTC. Robinhood said it will continue to work with the federal derivatives trading body to “promote innovation in the futures, derivatives and crypto markets.”
Robinhood’s Vice President and General Manager of Futures and International JB Mackenzie, nevertheless, stated with Monday’s hub launch, that his firm was “excited” to give its customers novel ways of using prediction markets.
Mackenzie said Robinhood looked forward to bringing its markets to US customers “in compliance with existing regulations.”
State of play
The launch of the hub allows Robinhood customers, however, to trade on event outcomes that have a bigger chance of passing CFTC censure, such as betting on the expected upper limit of the Federal Reserve funds rate in May.
According to reports, Robinhood’s prediction markets hub and tied-in contracts will be available US-wide via a partnership with Kalshi.
Sports regulatory journalist Robert Linnehan stated that Robinhood users can buy contracts for all upcoming NCAA matchups, “including the championship, and will receive $1 for every correct contract they own.”
Whatever the CFTC’s response, Robinhood is continuing its crusade with a long-term goal in mind driven by the firm’s belief in “the power of prediction markets”