Robinhood CEO Says Company Considering Moving into Sports Betting

The CEO of Robinhood, an online stocks and crypto trading platform, has suggested that the company is considering expanding into sports betting.

Ziv Chen

Last updated: December 5, 2024 3:13 PM EST • 3 min read

In this photo illustration, the Robinhood Markets, Inc. logo is displayed on a smartphone screen. Photo by Jaque Silva / SOPA Images / Sipa USA.

Another company vying to join the list of our best sports betting sites?

The CEO of Robinhood, an online stocks and crypto trading platform, has declared the company is considering expanding into the sports betting industry. Vlad Tenev, speaking at Robinhood’s first investor day, indicated that Robinhood could follow the template laid out by companies like Kalshi and Polymarket, offering event contracts on sports events.

Tenev said, “We’re keenly looking into that space. Nothing to announce just yet, but it’s so important to our customers and in culture that we’re excited about it.”

Robinhood started offering event contracts for the 2024 US presidential election but currently classifies this as a “white space,” where it doesn’t have significant penetration yet but could grow in the future.

Robinhood’s history with event contracts

Robinhood entered the event contracts market in October, announcing it was exclusively offering these markets to US customers with approval for margin investing and Level 2 or 3 in options trading. In a press release, Robinhood said, “We believe event contracts give people a tool to engage in real-time decision-making, unlocking a new asset class that democratizes access to events as they unfold.”

According to data released by the company, it received more than 500 million traded contracts in just one week, with the new feature encouraging more than 500,000 funded futures accounts.

How do event contracts work?

Event contracts came into the spotlight in the build-up to the 2024 presidential election, as political betting is illegal in all US states where sports betting is legal. However, event contract wagering isn’t considered traditional sports betting, so it became popular in the US.

With approval from the Commodity Futures Trading Commission (CFTC), event contracts let bettors predict an outcome, yes or no, in a specified time and buy stocks for each answer. The price of those stocks will be based on the likelihood of that outcome, and bettors will earn $1 for each stock they hold.

For example, the bettor could say “yes” to Donald Trump winning the 2024 presidential election. If they bought ten stocks for $20, they would make a profit of $10 when the contracts were resolved, leaving them with $30 in total.

Successes and struggles of other event contract platforms

The impact of event contracts on the future of US political events is still being determined. The CEO of Polymarket recently revealed in an interview with CNBC that he believes event contract markets will be used with polls to predict the future of elections.

While polls predicted a tight race for the 2024 presidential election, event contract wagering heavily favored Donald Trump and painted a more accurate picture of the final result.

While the future seems bright for this new prediction market, not everything has been positive. The aforementioned Polymarket was recently banned in France for not operating legally. France was a crucial market for Polymarket in the buildup to the US election, with a French player drawing significant headlines for placing a huge bet that resulted in a $80 million payout

Written By:
Ziv Chen

Ziv has over two decades of experience in the igaming and sports betting industry, having served in senior marketing and business development positions with both B2C and B2B companies, including Playtech and Microgaming. In 2019, Ziv decided to pursue his passion for writing and became a fulltime industry journalist, covering casino, sports, and gambling business news. He’s specialties include casino games and technology, US state gambling regulation, company performance, as well as gambling affiliates and marketing. As a Pitt graduate, Ziv is a diehard fan of all Pittsburgh sports teams, with the Steelers at the top of the list. In his free time, he enjoys reading crime fiction, biographies (mainly of sports personalities, but not only) and American history. Ziv’s Favorite quote: “We're going to pursue perfection, knowing full well we won't catch it, but we're going to relentlessly chase it," Mike Tomlin, Pittsburgh Steelers Head Coach.