With the U.S. presidential race approaching its climax, Robinhood has joined the ranks of firms offering event contracts for the upcoming winner of the White House. On Monday, the investing app announced that Robinhood Derivatives would offer two contracts, allowing traders to speculate on whether former President Donald Trump or current Vice President Kamala Harris will win the election. This move comes as Trump and Harris make their final appeals with only seven days remaining in the 2024 race.
Blockchain-based prediction platforms like Polymarket have brought election betting into the spotlight, and while Robinhood’s offering shares similarities, it does not rely on cryptocurrency technology. Traders can purchase contracts for a candidate that will adjust in price and eventually pay out $1 per contract if the selected candidate wins.
However, unlike Polymarket’s platform, Robinhood’s offering is solely focused on the United States. Robinhood stated that the contracts are offered through ForecastEx, a futures commission merchant regulated by the Commodities Futures Trading Commission (CFTC).
Since 2022, Polymarket has been off-limits for users in the U.S. after the startup agreed to a cease and desist order from the CFTC and settled a $1.4 million fine. Although Polymarket reportedly has user vetting systems in place, Robinhood clearly outlined its restrictions in its announcement.
Participation in the market is forbidden for anyone affiliated with the U.S. presidential election or politics, including White House staff and members of presidential campaigns. Additionally, each bettor must be approved by Robinhood Derivatives to participate in the market.
Robinhood’s decision to offer event contracts for the 2024 race demonstrates the increasing mainstream popularity of political betting. Launched during the home stretch of the 2024 race, it may also illustrate how shifts in the regulatory landscape are influencing firms’ approaches to this field.
Last month, the prediction market platform Kalshi achieved a significant legal victory over the CFTC. Despite the CFTC’s two-year effort to block Kalshi’s prediction markets, a federal judge ruled that the platform could proceed with its plans to launch U.S. election markets, starting with congressional bets.
Although the ruling was quickly appealed, Kalshi still launched a U.S. election betting pool shortly after. Furthermore, earlier this month, the multinational brokerage firm Interactive Brokers entered the election betting scene by unveiling its own set of election-based contracts.
While Trump or Harris could emerge as the victor on Election Day as the results from key battleground states trickle in, the market offered by Robinhood Derivatives will be settled two months later, after the results are certified by Congress. Based on Congressional Record filings, the expected date is January 7, in accordance with the terms of ForecastEx’s U.S. presidential market contract.
Robinhood did not immediately respond to Decrypt’s request for comment.
Edited by Andrew Hayward