Massachusetts securities regulators have launched an investigation into Robinhood’s newly launched prediction markets, which permit customers to put bets on numerous real-world occasions—together with faculty basketball tournaments.
In response to a March 24 report by Reuters, Massachusetts Secretary of State Invoice Galvin confirmed that his workplace issued a subpoena to Robinhood final week.
The subpoena requests particulars on the platform’s advertising methods and the variety of Massachusetts-based customers taking part in occasion contract buying and selling associated to school basketball.
Robinhood’s Sports activities Bets Danger Turning Investing Into Playing
Galvin voiced considerations that Robinhood is blurring the road between investing and playing, significantly by connecting sports activities betting—in style amongst youthful demographics—to brokerage providers.
“That is simply one other gimmick from an organization that’s superb at gimmicks to lure buyers away from sound investing,” Galvin informed Reuters.
Robinhood launched its prediction markets function on March 17 via a partnership with Kalshi, a platform regulated by the Commodity Futures Buying and selling Fee (CFTC).
The function permits customers to invest on the outcomes of particular occasions, reminiscent of sports activities outcomes or financial indicators just like the federal funds price.
Occasion contracts, which have been gaining traction on platforms like Kalshi and the blockchain-based Polymarket, have drawn scrutiny from regulators.
These contracts let customers guess on a variety of outcomes, elevating questions on whether or not they need to be categorised—and controlled—as derivatives.
This isn’t the primary time Robinhood’s occasion contracts have confronted regulatory stress.
Simply final month, the platform was requested by the CFTC to remove Super Bowl betting contracts, which it did inside a day of their launch.
The Massachusetts probe can also be looking for Robinhood’s inside communications about its choice to proceed with faculty basketball-related contracts shortly after the CFTC’s intervention on Tremendous Bowl choices.
SEC Drops Robinhood Crypto Probe With out Enforcement Motion
Final month, Robinhood Crypto revealed that the U.S. Securities and Trade Fee (SEC) has officially closed its investigation into the platform with out taking any enforcement motion.
The probe, which started final spring over considerations about potential unregistered securities gross sales, ended on February 21.
In one other improvement, Robinhood Markets is ready to expand its cryptocurrency services into Singapore by 2025, leveraging its latest acquisition of Bitstamp Ltd., a European digital-assets alternate.
The transfer can be guided by native regulatory frameworks, with Robinhood aiming for a late 2025 launch, in keeping with Johann Kerbrat, vice chairman and basic supervisor of Robinhood Crypto.
Robinhood’s enlargement comes amid a crypto market resurgence, pushed partially by U.S. President Donald Trump’s pro-crypto insurance policies.
The corporate reported fourth-quarter 2024 revenues exceeding $1 billion, surpassing Wall Avenue estimates of $940.8 million.
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