Robinhood Teams Up with Kalshi for Super Bowl Event Trading

Robinhood has revealed a new team-up with Kalshi, a regulated prediction market. This partnership lets users trade event contracts for Super Bowl LIX. As a result, Robinhood account holders can now trade on the outcome of the championship game between the Kansas City Chiefs and the Philadelphia Eagles.

Robinhood and Kalshi Introduce Event Trading as a Sports Betting Alternative

This offering differs from regular sports betting, which states regulate. Instead, it falls under federal oversight through the Commodity Futures Trading Commission (CFTC). To set it apart from typical sportsbook wagering, Robinhood and Kalshi call this initiative “event trading” rather than “betting” or “gambling”.

Robinhood users can bet on the Super Bowl winner by buying contracts. Each right guess pays out $1 per contract, minus a small fee. This way of betting is different from normal sportsbooks. Big names like FanDuel and DraftKings offer lots of bet types, including point spreads and bets on specific players. However, Robinhood’s Super Bowl contracts let you pick the winner. Experts in the field think there might be more complicated options down the road.

Kalshi, a company with a track record in offering event contracts for political outcomes and economic indicators, has now set its sights on the sports market. In January, the firm asked the CFTC to approve contracts for big sports events like the Super Bowl, NBA championships, and NCAA tournaments. Kalshi works in a different way than regular sportsbooks. Instead of making money by setting odds against bettors, it runs an exchange where users trade with each other. This approach helps to cut down on costs and boost market liquidity.

With 25 Million Users, Robinhood’s Event Trading Could Disrupt Traditional Sportsbooks

Robinhood famous for its no-fee stock trading app now offers event contracts to its big user base of almost 25 million users. This wide reach in jurisdictions where regular sports betting is not legal yet, could shake up the industry. Some experts think this team-up might change the sports betting scene by giving people an easier and cheaper option than sportsbooks.

Kalshi got the green light from the CFTC to sell sports event contracts, but regulators are still keeping a close eye on things. Crypto.com wants to do something similar, and the agency is looking into it right now. This raises questions about how the US will handle these markets under its financial rules.

Robinhood’s move into event trading fits with its bigger goal to make finance more accessible and offer different ways to invest. As more people get interested in sports-related trading, the company might look into adding more event contracts beyond just the Super Bowl. This could change how sports, finance, and entertainment work together.