Robinhood Ventures into Prediction Markets with Kalshi

• Robinhood collaborates with Kalshi to offer prediction markets
• A fresh, separate product has been introduced by the company this week
• Robinhood joins the list of platforms expanding into prediction markets

With the Super Bowl now concluded, elections far behind us, and the college basketball season poised to begin on Thursday, Robinhood has unveiled the relaunch of its prediction markets hub. This allows users to forecast the outcomes of March Madness games.

March Madness Opens New Avenues for Robinhood

March Madness ranks among the most bet-on sports events in the United States. The American Gaming Association projects that a staggering $3.1 billion will be wagered through the regulated gambling market in 2025 alone.

The prediction markets hub made its debut as part of a collaboration with KalshiEX LLC, a well-established company already offering prediction markets across various events, such as politics, sports, and even court trials.

Robinhood has been eager to transcend its traditional investment focus and delve into the realm of prediction markets, a move that is finally coming to fruition. JB Mackenzie, the General Manager of Futures and International at Robinhood, expressed enthusiasm for this venture:

“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.”

The prediction markets hub is a standalone product tailored to enthusiasts interested in sports, providing them with an opportunity to support an outcome. However, this type of content has faced significant challenges, initially from the Commodity Futures Trading Commission, which engaged in regulatory battles with both Kalshi and Robinhood, followed by scrutiny from state-level regulators.

For instance, Kalshi was initially requested to exit Nevada, although the Silver State has since granted the platform additional time to present its case. Concurrently, the regulated sports betting market and tribal gaming operators have staunchly opposed prediction markets, drawing parallels to sports gambling.

Mixed Reactions from Sports Betting Giants Toward Prediction Markets

Nevertheless, Kalshi and other platforms argue that their offerings are not traditional betting markets, as they do not determine the odds themselves but rather let public sentiment dictate the outcomes. Robinhood is by no means the sole company exploring this model.

While some mainstream companies have been resistant to the emergence of prediction markets, others have embraced them, with DraftKings itself planning to introduce future prediction markets. Despite facing criticism, prediction markets appear to be here for the long haul.