Robinhood Halts Super Bowl Bets a Day After Launch on CFTC Request - What You Need to Know
Just one day after rolling out Super Bowl betting to 1% of its customers on February 4, Robinhood Derivatives has put a stop to the service. This comes after Robinhood Markets received a request from the Commodities and Futures Trading Commission (CFTC) to revoke its customers' access to the event contracts.
The Super Bowl betting product was launched in partnership with prediction market Kalishi. It allowed users to place wagers on the outcome of the highly - anticipated February 9 National Football League championship game between the Philadelphia Eagles and the Kansas City Chiefs. However, the halt has put a sudden stop to the excitement for many who were looking forward to participating.
In an announcement made on February 4, Robinhood stated that it would suspend the further rollout of the Pro Football Championship market. The company is currently in the process of working closely with the CFTC to better understand the concerns raised by the regulatory body.
Even though the product was only available to a small percentage of its user base, some customers had already placed trades. Robinhood expressed disappointment, especially considering that they had maintained regular communication with the CFTC about their intentions and plans to offer this product.
This halt follows reports that the CFTC was investigating Crypto.com and Kalshi regarding their offerings of Super Bowl event contracts and whether they comply with derivatives regulations. Event contracts operate differently from traditional betting. Instead of odds set by a bookmaker, the odds in event contracts are determined by a pool of users wagering on the likely winner.
While Crypto.com informed Cointelegraph that it would continue to offer the wagers despite the ongoing probe, Robinhood has taken a different route.
This isn't Robinhood's first foray into event contracts. In October, the company made its initial move in this area by offering trades based on the outcome of the US presidential election. This followed a court victory by prediction platform Kalishi against the CFTC, which allowed the platform to provide US - based users with contracts for betting on election outcomes.
The situation with Robinhood and the Super Bowl bets highlights the complex regulatory environment surrounding event - based wagering and the challenges that companies face when trying to introduce new betting products in the market.