Robinhood’s shares rose by 7% following the launch of a new prediction markets division that will allow the online brokerage to tap into new forms of assets such as cryptocurrencies and event derivatives.
The new feature will enable users to bet on contracts for different events such as the College Basketball Tournaments and the expected Fed funds rate in May.
Robinhood partnered with Kalshi, the first CFTC-regulated prediction platform in the U.S., to offer these event contracts. Kalshi already lists predictions on a variety of outcomes, from election results to Rotten Tomatoes movie ratings.
JB Mackenzie, the VP of Futures and International at Robinhood, noted, “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.” Such markets are often more reliable than polls and have platforms such as Kalshi that predicted the victory of Donald Trump in the 2020 elections.
Prediction markets have seen growing popularity since 2024, especially after Kalshi won a legal battle allowing it to list political event contracts. Robinhood first explored political betting in October by letting users bet on the presidential election between Kamala Harris and Donald Trump.
Apart from event contracts, Robinhood is also venturing into the crypto business. In March, the company listed memecoins such as Pengu, Pnut, and Popcat while it launched crypto futures contracts in January.
The move into betting markets and crypto is evidence that Robinhood is keen on expanding its services. The introduction of event contracts and memecoins could be seen as a step towards the diversification of the company’s offerings in new types of assets.
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