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- Robinhood has been dealt a subpoena in response to current launch of sports activities prediction markets
- Massachusetts regulators declare markets are a means round providing regulated sports activities betting
- Sports activities predictions markets herald over $200 million throughout March Insanity
Robinhood’s sports activities prediction markets are dealing with backlash from Massachutetts business regulators who’ve launched a probe into what they are saying is a gimmick to permit unregulated sports activities betting.
On March 17, in time for March Insanity, Robinhood added sports activities prediction markets to their hub by means of Kalshi, a US predictions market change. Nearly instantly, securities regulators in Massachusetts issued a subpoena to Robinhood on March 20. The hub additionally started providing contracts on predicting Federal Reserve choices.
Massachusetts Secretary of State Invoice Galvin has acknowledged issues with the hyperlinks between sports activities betting and investing on the Robinhood platform.
“That is simply one other gimmick from an organization that’s superb at gimmicks to lure buyers away from sound investing,” he mentioned.
Robinhood has till April 3 to reply to the subpoena.
“That is simply one other gimmick from an organization that’s superb at gimmicks to lure buyers away from sound investing.” — Invoice Galvin, Massachusetts Secretary of State
Robinhood beforehand tried to launch occasion contracts throughout the Tremendous Bowl. Nonetheless, they delayed till the Commodity Futures Buying and selling Fee (CFTC) concluded their danger administration evaluation. Not too long ago, the CFTC concluded their evaluation and deemed they’d no authorized justification to forestall Robinhood from providing entry to those contracts.
Sports activities predictions markets or events-based contracts permit buyers to buy Sure-or-No contracts on specific occasions. Within the case of March Insanity, prospects can make investments on particular person matchups and the outright winner for $1 per contract at a value that fluctuates in real-time primarily based on market sentiment.
Kalshi Sees Over $200 Million in Predictions Markets
The surge in prediction markets has proved particularly sturdy throughout this season’s March Insanity event. Kalshi has already recorded over $200 million in buying and selling quantity throughout the event earlier this week. Roughly $13 million in contracts have been additionally positioned on the ladies’s event.
Authorized and controlled sports activities betting is simply allowed in 39 states and lots of states solely provide retail sports activities betting or sports activities betting at designated tribal casinos. Kalshi is a regulated change platform accessible in all 50 states. This opens the door for buyers all throughout the nation to spend money on their opinions on sports activities, politics, leisure and different fashionable occasions.
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