Robinhood launches $3B NCAA betting hub

Robinhood has partnered with Kalshi to introduce a prediction markets hub, allowing users to bet on event outcomes such as the NCAA basketball tournaments.

This move positions Robinhood against competitors like Polymarket, potentially tapping into a $3 billion betting market for NCAA events.

The partnership leverages recent regulatory leniency, enabling Robinhood to expand its offerings beyond traditional stock trading into emerging asset classes, including cryptocurrencies and event contracts.

Robinhood's stock rose significantly following the announcement, reflecting investor optimism about the company's strategic expansion.

"We believe in the power of prediction markets and think they play an important role at the intersection of news, economics, politics, sports, and culture," said JB Mackenzie, Vice President and General Manager of Futures and International at Robinhood.

The prediction markets hub will initially offer contracts on the men's and women's College Basketball Tournaments, with plans for further expansion.

This comes after Robinhood's successful foray into political event contracts, where it allowed users to bet on election outcomes.

Kalshi, a CFTC-regulated exchange, has been instrumental in this partnership, having previously faced regulatory challenges over its election-related prediction markets.

The collaboration indicates a more cooperative relationship with regulators, as noted by Kalshi CEO Tarek Mansour, who highlighted the collaborative effort to launch sports-related contracts.

Robinhood's move into prediction markets could significantly boost its revenue by capturing a portion of the lucrative NCAA betting market.

The company has been expanding its presence in cryptocurrencies, listing memecoins and offering futures contracts tied to cryptocurrencies like Bitcoin (CRYPTO:BTC).

"Prediction markets are the future, not just as an active trading asset, but also news and information," noted Vlad Tenev, Robinhood CEO.

This strategic shift aligns with Robinhood's broader strategy to diversify its offerings and attract a broader user base.

The launch of the prediction markets hub also reflects Robinhood's efforts to innovate and compete in a rapidly evolving financial landscape.

By partnering with Kalshi, Robinhood aims to capitalise on the growing popularity of prediction markets, which have become increasingly prominent in recent years.