Robinhood Discontinues Event Contracts After CFTC Request
Robinhood has suspended event contracts that allowed betting on the Super Bowl outcome following a request from the U.S. Commodity Futures Trading Commission (CFTC).
Launched just a day prior, the suspension has left Robinhood "disappointed," according to Lucas Moskowitz, the company's general counsel. Despite the CFTC's directive, Kalshi's football championship contracts remain legal.
The decision to halt contracts comes amidst Robinhood's expansion into segments popular with retail investors. The company rolled out contracts to 1% of its customers, offering an opportunity to capitalize on betting enthusiasm surrounding the iconic sporting event.
"Prediction markets and event contracts face complex regulatory landscapes," noted Michael Ashley Schulman of Running Point Capital Advisors. "The CFTC may view them as disguised retail betting platforms, especially with sporting events' higher frequency compared to presidential elections."
Despite their high-risk nature, event contracts have gained traction, especially after a U.S. court overturned the CFTC's attempt to block KalshiEX's election betting contracts.
Robinhood's derivatives arm intends to launch a more comprehensive event contracts platform later this year.