Robinhood will partner Kalshi to run its Super Bowl event contracts, the retail trading platform announced today (3 February).
The deal will see eligible customers permitted to place trades on the outcome of the upcoming Super Bowl between Kansas City and Philadelphia this Sunday.
It follows comments by Robinhood management in December they were looking “keenly” at the sports betting space following the roll-out of its political event contracts in the lead up to the 2024 presidential election.
Robinhood said: “With an emerging asset class like event contracts, we recognise an opportunity to better serve our customers as their interests converge across the markets, news, sports and entertainment.
There had been speculation Robinhood had been looking to enter the sports betting space in a more direct fashion through a potential M&A acquisition of a smaller US operator like Fanatics or Rush Street Interactive.
The difficulty of entering the market was highlighted in a note published by JMP Securities last year regarding Robinhood’s interest in the space.
The analysts said: “The sector has proven it can take years (if not decades) to properly build an end-to-end app with product and technology, including the need for executives, and potentially holders, of the stock to obtain gaming licenses.
“The US sports betting market is projected to increase to $14bn in 2024E, presenting an attractive, growing market, but even investments from the established mid-scale online companies have ranged from hundreds of millions to billions of dollars, only to garner mid-single-digit market share.”
Robinhood sports event contracts: will regulators clamp down?
Kalshi played a key role in reviving enthusiasm in the event contract space after beating back an attempt by the US derivatives regulator to ban its political event contracts in the courts.
Following Kalshi’s victory several other exchanges opted to launch political contracts including Robinhood.
While Crypto.com also launched Super Bowl sports event contracts last year, trading is currently paused following a Commodity Futures Trading Commission (CFTC) review into the products.
It remains to be seen if sports event contracts will face regulatory push back in 2025.
There is speculation Trump administration will prove more friendly to event contracts, with some highlighting Kalshi’s recent hire of Donald Trump Jr. as an advisor as evidence.
Analysts at Regulus Partners argued however last month increased federal oversight was likely.
They said: “We struggle with the idea that a Trump White House and a Republican Congress will let investing to become sports betting by another name just because the first operator has ‘crypto’ in the title – and Trump likes crypto.
“If CFDs can offer sports, then the states have just lost their right to regulate and tax sports betting. This outcome does not suit any major vested stakeholder; nor does it provide a working legal-regulatory environment, in our view.
“We believe that 2025 has started with a critical mass of US legal workarounds for quasi online gambling products reaching a tipping point that is overwhelming the state-by-state solution.
“The generally pro-gambling nature of the incoming administration actually increases the likelihood of action, in our view, because gambling stakeholders will be listened to.”