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Massachusetts’ securities regulator has reportedly launched a probe over Robinhood’s prediction markets offering that has allowed users to bet on the outcomes for a slew of events, including basketball tournaments.  Reuters reported on March 24 that Massachusetts Secretary of State Bill Galvin said his office subpoenaed Robinhood last week to get information on its marketing materials and the number of Massachusetts-based users that traded sports events contracts on college basketball tournaments. Galvin said he was concerned the trading platform was “linking a gambling event on a popular sports event that’s especially popular to young people to a brokerage account.” “This is just another gimmick from a company that’s very good at gimmicks to lure investors away from sound investing,” he added. Robinhood launched a prediction markets hub on March 17 that would be initially available through the Commodity Futures Trading Commission-regulated prediction platform Kalshi and would feature event contracts on college basketball tournaments and the May federal funds rate.  A Robinhood spokesperson told Cointelegraph that the event contracts “are regulated by the CFTC and offered through CFTC-registered entities.” “Prediction markets have become increasingly relevant for retail and institutional investors alike, and we’re proud to be one of the first platforms to offer these products to retail customers in a safe and regulated manner,” the spokesperson said. Robinhood Markets (HOOD) share price remained relatively flat after the close of trading on March 24 after an over 9% jump over the day to close at $48.36, according to Google Finance. Robinhood is up nearly 30% so far this year but has fallen from its Feb. 14 all-time peak of $65.28. Source: Google Finance  The CFTC and Galvin’s office did not immediately respond to requests for comment. Event contracts are agreements that allow users to bet on the outcome of essentially anything, from…

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Filed under: News - @ March 25, 2025 4:29 pm