The chief executive officer of Robinhood Markets Inc. – which briefly offered customers the opportunity to bet on the Super Bowl earlier this month – says the trading platform will push for “regulatory clarity” on event contracts, including those involving sports.
“I think prediction markets are the future,” Robinhood CEO Vlad Tenev said Wednesday during the Menlo Park, Ca.-based company’s earnings call. “I think they're the future not just as an active trading asset, but also news and information. And Robinhood's going to be right there leading the way.”
Tenev noted Robinhood customers traded more than half a billion contracts tied to the 2024 presidential election and said a “comprehensive events platform” with a wide variety of contracts is coming later this year.
Clearing things up
However, Tenev also nodded toward some of the uncertainty around event contracts. Most notably, Robinhood, in partnership with prediction market Kalshi, rolled out event contracts tied to last Sunday’s Super Bowl – but only for a day.
On Feb. 4, Robinhood said the U.S. Commodity Futures Trading Commission (CFTC) had formally requested the company block customers from accessing sports event contracts. Robinhood suspended the new product even though it said it had been in regular talks with the CFTC about the company's plans to offer the contracts.
“As with any new innovative asset class, we're pushing the boundaries here, and there's not regulatory clarity across all of it yet, in particular, sports,” Tenev said on Wednesday. “But we believe in it, and we're going to be a leader. So you should expect us to not just offer it, but continue to drive and push for regulatory clarity industry-wide.”
Tenev’s comments suggest Robinhood and its popular trading platform plan to be a player in the up-and-coming business of prediction markets and event contracts, which allow people to trade (or “bet”) on outcomes connected to economics, politics, and (depending on the day, perhaps) sports, among other things.
Federally regulated prediction markets such as Kalshi and Robinhood offer a different kind of wagering than that provided by state-regulated sportsbooks such as DraftKings or FanDuel. Rather than bet on a point spread or moneyline, traders can buy and sell event contracts tied to certain outcomes, like an election.
The Commodity Futures Trading Commission (CFTC) has formally requested that Robinhood Derivatives, LLC (RHD) “not permit customers to access” sports event contracts.
— Robinhood Comms (@RobinhoodComms) February 4, 2025
While we continue to work with the CFTC to understand their concerns, we are suspending the rollout of the Pro…
This de facto wagering using prediction markets indeed rose to prominence in and around last year’s presidential election, with hundreds of millions of dollars worth of contracts traded via Kalshi, Robinhood, and elsewhere. But, in the wake of the election, the selection of event contracts is growing.
One area that prediction markets have recently pushed into is sports, with Crypto.com and Kalshi offering de facto wagering on the Super Bowl and other events. Those efforts are happening even as there is a lack of clarity about what is permitted and what is not, as Tenev noted on Wednesday.
It is my great honor to be nominated by President @realDonaldTrump as the next Chairman of the Commodity Futures Trading Commission, where I had served as a Commissioner in his last administration. The @CFTC plays a critical role in maintaining robust hedging and price discovery…
— Brian Quintenz (@BrianQuintenz) February 12, 2025
Crypto got pushback from the CFTC for its sports event contracts but that was in the final days of the Biden administration and under the previous leadership of the federal regulator. Moreover, Kalshi’s sports event contracts have not faced the same sort of official scrutiny from the CFTC, which is still technically fighting the company in court over its election-related markets.
Kalshi now has a member of the Trump family advising the company. Not only that, but Brian Quintenz, who joined the company’s board in 2021, said Wednesday that President Donald Trump had nominated him to become the next chairman of the CFTC.
From GameStop to ... games, non-stop
The nomination of Quintenz, as well as the actions and comments of the CFTC’s acting chairman, suggest the regulatory winds are now blowing favorably for prediction markets.
Robinhood and its 25 million customers are now poised to join the rush, especially when it comes to sports. Many users may already be inclined to dabble in wagering on football or basketball in addition to buying and selling meme stocks and cryptocurrency.
“A lot of our customers, who index on Millennial and Gen Z, are interested in sports in general,” Tenev said during the company’s investor day in December. “So we're keenly looking into that space.”
