As if there wasn’t enough skin in the game, Robinhood has rolled out a new feature that allows users to bet on the presidential election.
The company announced that users will have access to presidential election contracts starting Monday, effectively allowing them to bet on the outcome of the November 5 election. Users can trade either a Kamala Harris or Donald Trump contract so long as they’re an American citizen.
How does election betting work on Robinhood?
How does it work? “Get $1 for every contract you own if your candidate is certified in January—and nothing if they aren’t. Or close your position before January 6, 2025,” the platform’s copy reads. Robinhood is also careful to note: “This is a market, not voting.”
A company release says that these types of event contracts “allow customers to trade on the outcome of specific events, such as whether a candidate will win an election.”
Users will need to be approved for a Robinhood Derivatives account in order to trade contracts.
Why is Robinhood launching election betting now?
Part of the reason for Robinhood’s move may be because it’s been a banner year for election-prediction markets. Those include platforms like Polymarket, a VC-backed company that brought on statistician and journalist Nate Silver as an advisor earlier this year. PredictIt is another platform that’s popular and has a growing user base.
What do regulators say about election betting?
Even as Polymarket and similar platforms have grown in size and stature, the federal government has tried to tamp down election betting. In recent months, federal agencies such as the Commodity Futures Trading Commission (CFTC) tried to block election-outcome trades on a platform called Kalshi, but was stymied by a federal appeals court last month.
In recent weeks, it’s also become increasingly clear that the odds on these markets are malleable. According to reporting from the New York Times, big bets can sway the markets, such as when a single French trader made enormous bets on Trump to win the election on Polymarket. The company noted that it wasn’t necessarily a case of market manipulation—it’s just that there aren’t enough trades on the platform to dilute a relatively large trade that can move the numbers.
Has this affected Robinhood’s stock?
The news has helped jolt Robinhood’s stock price. As of midday Monday, Robinhood shares were up around 3%.