Robinhood Unveils Prediction Markets Hub in Time for March Madness

Trading platform Robinhood is seeking to capitalize on the March Madness hype with markets for this year’s edition of the tournament. Customers can expect to find offerings involving their favorite basketball teams and players.

The offerings are notably a part of Robinhood’s new prediction markets hub located in the trading platform’s app.

The March Madness Hype Gains Momentum

Robinhood has invited players to trade on the outcomes of one of the world’s biggest basketball tournaments, promising unparalleled excitement. March Madness event contracts are already available on the platform, allowing sports pundits to test their prediction skills.

Robinhood will also offer a market on what the upper bound of the target fed funds rate will be in two months. All contracts for both the basketball tournaments and target-fed funds rate will be available from 8 am to 3 am ET.

The launch of these contracts marks a return to event contracts for Robinhood, which backed down on similar offerings ahead of this year’s Super Bowl. Since then, Robinhood has been closely communicating with the Commodity Futures Trading Commission (CFTC), which has enabled the current launch.

New Hub, New Opportunities

In the US, Robinhood’s new prediction market hub will be supported by event contracts powerhouse KalshiEX, a CFTC-regulated exchange. According to the former company, a standalone hub will allow it to better serve its customers in America since prediction markets operate within a tightly regulated framework.

JB Mackenzie, VP and general manager of futures and international at Robinhood, commented on the company’s return to prediction markets, highlighting the important role of event contracts.

We’re excited to offer our customers a new way to participate in prediction markets and look forward to doing so in compliance with existing regulations.

JB Mackenzie, VP & GM of futures and international, Robinhood

Mackenzie noted that prediction markets sit at the intersection of news, economics, politics, sports, and culture. This echoed recent statements that prediction markets can be more reliable than traditional polls in determining the possible outcome of a political event or election. Prediction markets’ users have consistently proven to have reliable insight into the latest developments in the worlds of politics, sports, and economics, among others.  

Robinhood Releases Prediction Markets Memo

Speaking of the reliability of prediction markets, Robinhood described them as a type of product that is in the public’s best interest. In a newly released prediction markets memo, the company urged lawmakers to acknowledge the benefits and adopt policies that recognize the importance of prediction markets.

The combination of risk mitigation, information aggregation, speculation, and learning potential makes prediction markets a valuable economic and informational tool for businesses and individuals alike.

Robinhood statement

In its memo, Robinhood concluded that policymakers should “avoid rules that prohibit retail customers from taking advantage of the same opportunities available to institutional investors.”