It uses Kalsi’s recent legal victory to enter the US election event-related contract market.
US financial services company Robinhood Markets Inc. made a foray into the election outcome derivative contract market on Monday with the launch of “presidential election contracts.” These contracts, offered exclusively to approved US citizens, allow users to speculate on the outcome of the US Presidential election.
It follows trading platform Kalsi’s legal victory earlier this month, which overturned the Commodity Futures Trading Commission’s (CFTC) objections to offering election-related derivative contracts.
Several online casinos including Stake.com offer betting opportunities on US election results. However, they offer this outside the US as sports bets, not as derivative contracts.
Users Need to Update Their Apps
Robinhood users can access the new feature by updating their app and visiting http://go.robinhood.com/election. Daily updates are promised leading up to election day, Robinhood said in a post on X.
However, many X users complained that they updated the app but could not access the election outcome contract trades. To which, Robinhood Help responded by saying that the users should forward their details through private messages.
Currently, Robinhood offers contracts for only two candidates: Kamala Harris and Donald Trump. As of launch, the odds are skewed towards Trump at 64, with Harris at 37. Robinhood’s partnership with ForecastEx, its derivative unit, facilitates this expansion into the event-driven financial market.
“Event contracts empower users to make real-time decisions,” a Robinhood official stated, “unlocking a new asset class and democratizing access to events as they unfold,” according to a Quartz report quoted by CNBC.
Election Betting as Contract Trading
Last week, CFTC chairman Rostin Behnam, in an interview with Bloomberg TV, expressed concern over political speculative betting being passed as derivative contracts. He argued that the CFTC is mandated to monitor and regulate the US derivative markets, but speculative trade on election outcomes doesn’t quite make for derivative contracts. CFTC has moved an appeal against a federal court judgment that allowed Kalsi to offer election event-related contract trades.
Among the platforms offering derivative contracts on the US election results, Robinhood isn’t alone. However, their approach differs. While Polymarket is the only crypto-first platform, Interactive Brokers Group (IBKR) and PredictIt offer crypto trading. Interestingly, Kalsi, though not directly using cryptocurrency for transactions, boasts a founder, Ralph Kalsi, who’s a prominent figure in the blockchain space.
Robinhood’s announcement of election contract trading led to a 4% jump in their share price on Monday. This news follows their earlier introduction of futures and index options trading to their mobile app.
