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Days after Kalshi announced an expansion of its sports offerings with spreads and totals, Robinhood, another popular prediction platform, has made a significant move by launching pro and college football prediction markets within its app. This new feature allows users to place bets on the first two weeks of the NFL and NCAA football seasons.
As the season unfolds, Robinhood plans to introduce additional markets, with Week 3 games set to be added shortly after Week 1 concludes. The platform aims to provide predictions for all regular-season NFL matchups, along with all NCAA Power 4 schools and Notre Dame.
“Football is far and away the most popular sport in America,” said Robinhood VP & GM of Futures and International JB Mackenzie. “Adding pro and college football to our prediction markets hub is a no-brainer for us as we aim to make Robinhood a one-stop shop for all your investing and trading needs.”
‘These are not bets’
Robinhood is registered as a Designated Contract Market (DCM) with the Commodity Futures Trading Commission (CFTC), allowing it to offer prediction markets on various topics, including current events, sports, and politics, across the United States.
While announcing the launch of its football events on Tuesday(Aug 19), the company clarified that its new event contracts should not be classified as sports betting. Instead, they operate within a financial market framework where buyers and sellers engage to determine prices.
“Robinhood event contracts allow for speculation in prediction markets; these are not bets,” the company stated on its website.
“Unlike sports betting, where the firm sets a line, event contracts leverage the power and rigour of financial market structure and are offered in a marketplace where buyers and sellers interact to set the price,” it added.
Robinhood Cites Huge Demand
Recently, Robinhood executives revealed that a significant portion of the company’s nearly $1 billion in prediction markets trading last quarter was focused on sports. During a July earnings call, CEO Vlad Tenev noted:
“Since we launched, customers have engaged in over 100 million economic contracts, so really nice. A large percentage of the transactions in prediction markets are with sports, and we love to see our customers engage in that way as well.”
“We’ve also been focused on that because that’s an area where not a lot of our competitors are present. So, we see that as a big opportunity and we’ve been investing.”
CFO Jason Warnick also emphasized the company’s commitment to expanding its offerings, stating, “We can tell by the engagement by customers that it’s a product that is resonating.”
Robinhood Continues Legal Battle in New Jersey
Yesterday, Robinhood took a major step in its New Jersey regulatory battle by filing a lawsuit in the U.S. District Court for the District of New Jersey against the New Jersey Division of Gaming Enforcement (NJDGE).
The company is seeking a permanent injunction to protect its sports-related event contracts from state gambling laws.
This action follows a cease-and-desist order issued by the NJDGE in March, claiming Robinhood and its partner Kalshi violated state sports wagering laws. Robinhood argues that federal law, specifically the Commodity Exchange Act (CEA), takes precedence over state regulations.
The lawsuit cites previous court victories where Kalshi secured preliminary relief against the NJDGE, including a temporary restraining order suggesting New Jersey law may be preempted by the CEA. However, the NJDGE has not agreed to halt enforcement actions against Robinhood.
After meeting with NJDGE officials in May without a response to follow-up requests, Robinhood reactivated access to its contracts for New Jersey customers and filed the lawsuit to protect its business and users from potential legal penalties.
Source: SBCAmerica/NEXT
Featured Image Credit: Robinhood Newsroom
