A day after launching Super Bowl betting contracts, Robinhood closed him at CFTC’s request.
On 4 February, Robinhood pulled a plug on his super bowl betting contracts a day after the launch, after a request from the US Commodity Futures Trading Commission.
This step comes when regulatory phenomena-based trading is rapidly careful with products, especially tied with major sports events.
Products launched in partnership with Prediction Market Platform Kalashi allowed users to place bets on the result of super bowl matchup on 9 February between Philadelphia Eagles and Canus City heads.
Only 1% of Robinhood customers had access to contracts before being suspended. Those who had already placed bets will either be able to close their positions or see them through disposal, but no new trades will be allowed.
Robinhood, disappointed with the turn of events, said in a tweet that it was in “regular communication” with CFTC about its plans and was disappointed with the result.
The company did not disclose the accurate argument behind the intervention of the CFTC, but the decision comes amidst a comprehensive regulatory investigation of the event-based contracts.
Two days ago, the agency began an investigation at Crypto.com and Kalshi, asking whether their own super bowled contracts complied with derivative laws.
Robinhood is not new for event-based trading. In October 2024, the company took its first step with contracts related to the US presidential election results.
The launch ruled the court’s decision in favor of Kalashi, which challenged the CFTC’s efforts to block the election-based predictive markets.
The legal victory allowed Kalashi to continue the election contracts offer, but it greatly reduced the regulator gray area around the event-based derivatives.
A CFTC spokesperson strengthened his concerns, stating that it would “exercise its inspection authority to the extent” to ensure that the firms would have to comply with derivative laws, Reuters. Informed,
The agency is working hard on whether these products fall under the traditional derivative rules or if they should be considered as a separate class of financial instruments.
For Robinhood, this latest barrier cannot mark the end of its push in the space. The company has indicated a plan to launch a more expander event contract platform at the end of this year, indicating that it still sees opportunities in the market.
