Robinhood Rises Again: March Madness Prediction Markets!
Robinhood Pushes Back Against CFTC by Introducing Prediction Market Platform, Featuring March Madness Brackets
Looks like the feisty Robinhood isn't backing down! This popular U.S-based stock trading platform seems determined to test the limits.
Despite encountering a roadblock when the Commodity Futures Trading Commission (CFTC) blocked their Super Bowl LIX betting market in February, Robinhood is back to challenge the federal body's boundaries, introducing the March Madness markets.
Founded by Bulgarian-American entrepreneur Vlad Tenev, Robinhood revealed Monday the launch of a prediction markets hub on their app. Designed to let customers trade contracts for various events, including this year's men and women's NCAA basketball tournaments.
Given the CFTC's last-minute intervention to halt the widely publicized Super Bowl markets, one can't help but wonder if Tenev's March Madness market will pass the Feds' regulatory scrutiny.
Dancing Through the Super Bowl and Beyond
Robinhood really shook things up with their heavily marketed Super Bowl event contracts, but the CFTC wasn't far behind, instructing the firm to cease offering them just a day later. However, Monday's announcement indicates that the Super Bowl was merely the beginning of Robinhood's sports event journey.
According to Robinhood's press release, contracts through the new hub - including March Madness - "will start rolling out today…and will be available to all eligible customers in the coming days." Although Reuters reports that the U.S firm has recently been in contact with the CFTC, assuring continuous cooperation to "promote innovation in the futures, derivatives, and crypto markets."
Robinhood's Vice President and General Manager of Futures and International, JB Mackenzie, expressed his excitement about giving customers new ways to explore prediction markets. Mackenzie emphasized that Robinhood looked forward to bringing these markets to U.S customers "in compliance with existing regulations."
Current State of Affairs
The introduction of the hub presents customers with opportunities to trade on event outcomes considered more likely to sail through CFTC approval, like betting on the anticipated Federal Reserve funds rate in May.
Reports suggest that Robinhood's prediction markets hub and related contracts will be accessible nationwide due to a partnership with CFTC-regulated exchange Kalshi.
According to sports regulatory journalist Robert Linnehan, Robinhood users can buy contracts for all upcoming NCAA matchups, "including the championship match," and will receive $1 for each correct contract they own.
While it remains to be seen how the CFTC will respond, Robinhood's push seems unrelenting, driven by the firm's faith in the "power of prediction markets."
Enrichment Insights:
- Robinhood's March Madness prediction markets utilize event contracts offered in conjunction with CFTC-regulated exchange Kalshi.
- The CFTC views these contracts as derivatives rather than gambling, but there are ongoing concerns and scrutiny regarding their legality.
- The CFTC has previously intervened to halt certain sports contracts and has also canceled a prediction markets regulatory forum.
- The situation remains contentious, with mixed reactions from states; some federal courts have upheld Kalshi’s CFTC-regulated status against state challenges, while others oppose these markets.
- As of late April 2025, Kalshi’s contracts remain available through Robinhood under CFTC oversight, but the agency has not issued a definitive ruling on sports prediction markets, leaving regulatory ambiguity.
- Robinhood, in the spirit of continuing their sports event journey, has launched the March Madness prediction markets, following a roadblock by the Commodity Futures Trading Commission (CFTC) with their Super Bowl LIX betting market.
- Partnership with CFTC-regulated exchange Kalshi is facilitating the nationwide availability of Robinhood's new prediction markets hub, potentially offering opportunities to trade on events like the anticipated Federal Reserve funds rate.
- Robinhood users are now able to buy contracts for upcoming NCAA matchups, including the championship match, with each correct contract netting them $1.
- Despite ongoing concerns and scrutiny regarding the legality of these sports contracts, Robinhood's push into prediction markets is unyielding, driven by their faith in the "power of prediction markets."
