Robinhood has launched a prediction market that will allow users to bet on this year's March Madness basketball tournament—the latest sign event derivatives are gaining traction in the U.S. despite ongoing regulatory challenges.
Beginning Monday, Robinhood users can place wagers on the National Collegiate Athletic Association's March Madness tournament, which runs from mid-March to early April.
The prediction markets are powered by Kalshi, a startup that fought and won its legal battle against regulators to operate event contracts during the U.S. presidential election last fall.
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It is unclear if the trading platform supports wagers denominated in crypto, which both startups support, or if users may only place bets in US dollars.
Neither Robinhood nor Kalshi immediately responded to Decrypt's request for comment on the matter.
Robinhood's rollout of money-line markets for sporting events comes as prediction market operators show signs of clearing at least some of the regulatory hurdles that have long prevented them from operating stateside.
Late last year, Kalshi won its lawsuit against the Commodities and Futures Trading Commission, enabling the startup to reaunch its betting pools on U.S. election outcomes.
In the weeks following its legal victory, the trading platform had notched more than $275 million in inflows to its electoral markets—a sign of Americans’ appetites for prediction markets.
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However, market operators still face some scrutiny from regulators, complicating their efforts to increase access to prediction markets in the U.S.
Last month, Robinhood shuttered its prediction market service for the Super Bowl just a few hours after its launch, Fortune Magazine reported. The decision came after the trading platform received considerable pushback from the CFTC, according to the publication.
Meanwhile, Kalshi received last week an order from gambling regulators in Nevada to halt its trading offerings for sporting events and elections, Kalshi co-founder Tarek Mansour said in an X post. The cease-and-desist order accused the startup of offering contracts in a similar manner to unlicensed sports betting services.
Robinhood shares are trading at $42.02, up roughly 3% in the past 24 hours.
Edited by Sebastian Sinclair
