Hoping to move swiftly past the tumultuous start to its sports event contract venture, Robinhood has announced the launch of a prediction markets hub within its app.
The hub will initially be accessible in the US through Kalshi, an exchange regulated by the Commodity Futures Trading Commission (CFTC). However, the firm believes that building a standalone hub will allow it to better serve its customers.
Robinhood customers will be allowed to trade contracts on what the upper bound of the target fed funds rate will be in May, as well as the upcoming men’s and women’s College Basketball Tournaments.
JB Mackenzie, VP and GM of Futures and International at Robinhood, said: “We believe in the power of prediction markets and think they play an important role at the intersection of news, economics, politics, sports, and culture.
“We’re excited to offer our customers a new way to participate in prediction markets and look forward to doing so in compliance with existing regulations.”
Robinhood attempted to launch sports event contracts earlier this year but was forced to suspend them within 24 hours of launch by the CFTC. At the time, the firm expressed disappointment due to working closely with the regulator on the launch.
Looking to make sure there wasn’t a repeat, Robinhood has again confirmed it has been in close communications with the CFTC ahead of this planned launch.
In an announcement, the company wrote: “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.”
So what has changed?
Before Robinhood’s first launch, Crypto.com attempted to launch sports events contracts in December under the closing stages of President Joe Biden’s administration. The CFTC raised concerns about sports events contracts blurring the lines between financial trading and betting.
Robinhood may have believed that the election of President Donald Trump would result in a different conclusion, which would have been cemented due to Trump’s appointment of Caroline Pham, the new Acting Chair of the CFTC.
However, Pham was still working on changing the viewpoint of the agency, something she has now achieved a month later.
