Robinhood Suspends Sports Event Contracts Rollout Amid CFTC Inquiry
Robinhood (HOOD) has announced the suspension of its rollout of event contracts following a formal request from the Commodity Futures Trading Commission (CFTC).
The CFTC has asked Robinhood to "not permit customers to access" sports event contracts, which the trading platform launched on Monday for the upcoming Super Bowl LIX. Robinhood intended to allow customers to trade on the winner between the Kansas City Chiefs and Philadelphia Eagles.
The company estimates that approximately 1% of its users were enrolled in the new product. Robinhood is working to provide options for customers to close or resolve their positions.
"We are disappointed by this outcome, especially given that we had been in regular communication with the CFTC about our intent and plans to offer this product," Robinhood said in a statement.
Despite the news, Robinhood's stock price has gained approximately 1.56% in midday trading.
The suspension of event contracts reflects the ongoing regulatory scrutiny surrounding these products and the derivatives markets in general. Robinhood has advocated for balanced regulation, including participating in CFTC roundtables and providing written feedback.