Betting on March Madness Now Possible at Robinhood Care of Kalshi
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Robinhood, a well-known trading platform, is collaborating with Kalshi in offering a prediction markets hub in its app, which includes the chance to wager on the upcoming March Madness tournament. For now, it has been announced that there will be betting or trading on all games in March Madness in all 50 US states care of Robinhood and Kalshi.
Robinhood, the renowned trading platform, has officially announced a partnership with Kalshi to introduce a 'prediction markets hub' within its app, enabling users to trade on the outcomes of major events. Among the first offerings available are contracts for the up and coming men's and women's basketball tournaments, allowing users to engage in prediction markets for March Madness.
This collaboration between Robinhood and Kalshi marks a significant expansion into event-based trading. However, it also raises regulatory questions, particularly given Robinhood's prior hesitation. Earlier this year, a deal between the two companies had been finalized in preparation for the Super Bowl, but Robinhood withdrew following concerns introduced by the Commodity Futures Trading Commission. The company has not disclosed what has changed ever since that reversal, leaving industry observers questioning whether the regulatory landscape has shifted or if Robinhood has found a new approach to compliance.
Nationwide betting on March Madness
According to the announcement, the new trading feature will allow users to trade or bet on every single game of the NCAA's March Madness tournament across all 50 states through both Robinhood and Kalshi. The partnership aims to leverage Kalshi's experience in prediction markets, which previously saw engagement during major political events, including the US elections.
Kalshi Chief Executive Officer Tarek Mansour expressed enthusiasm about the launch, emphasizing the thrill of prediction markets in highly unpredictable events such as March Madness. "As we demonstrated during the election, there's nothing more exciting than participating in prediction markets during unpredictable events," Mansour stated. "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."
Robinhood's vision for prediction markets
Robinhood Derivatives, LLC (RHD) provided further details on the new feature in its official release, stating that the prediction markets hub will be fully integrated within the Robinhood app. At the launch, users will be able to exchange contracts based on the target federal funds rate for May, in addition to betting on the outcomes of the college basketball tournaments.
"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," said Vice President and General Manager of Futures and International at Robinhood, JB Mackenzie. "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."
Regulatory challenges and potential legal risks
While the new feature expands Robinhood's offerings, it may also expose the company to regulatory scrutiny. Kalshi has already faced legal challenges in Nevada since it began offering its prediction markets, with state regulators threatening both civil and criminal penalties for violating sports betting laws.
By integrating prediction markets for March Madness into its platform, Robinhood may now find itself subject to similar regulatory risks. Sports betting is heavily regulated in the United States, with different states enforcing varying levels of restrictions. Nevada, in particular, has been aggressive in challenging companies that attempt to offer sports betting without proper licensure. It remains to be seen how Robinhood will navigate these potential legal hurdles and whether the company has secured the necessary approvals to offer prediction markets across all 50 states.
A new era for event-based trading
Robinhood's decision to embrace prediction markets reflects a trend of blending finance with event-driven speculation. By allowing users to engage with markets that intersect sports, politics, and economic indicators, the company is positioning itself at the forefront of a new form of trading. However, given the scrutiny surrounding both Robinhood and Kalshi, this move could prove to be a high-stakes gamble.
For now, users can explore the new prediction markets hub in the Robinhood app and participate in March Madness trading. Whether this feature remains a long-term offering will likely depend on how regulators respond in the coming months.
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