Betting on elections in the United States is quickly going from taboo to a typical day at the office for some Americans.
Robinhood Markets Inc. announced on Monday that its popular stock trading app has a new feature: presidential election event contracts.
The product, which Robinhood is gradually rolling out to its clientele, will allow users to buy and sell "Yes" contracts for either Democrat Kamala Harris or Republican Donald Trump for this year's U.S. presidential election.
Presidential Election Market update: Oct 28 ??
— Robinhood (@RobinhoodApp) October 28, 2024
Follow the forecast on Robinhood. pic.twitter.com/i3oNSRb5ex
Customers can only purchase a “Yes” contract for one of the candidates, not both, at a price ranging from $0 to $1. Similar to other election-related contracts, when Congress certifies the winner early next year, Robinhood’s traders still holding a position will either get paid a full dollar or nothing depending on the outcome.
“We’ve heard from our customers that having access to the market in real time is essential – it’s why, for example, we launched 24/5 trading and recently announced our plans to launch futures trading in the coming months,” Robinhood said in a press release. “We believe event contracts give people a tool to engage in real-time decision-making, unlocking a new asset class that democratizes access to events as they unfold.”
Robinhood’s entry into de facto election wagering gives Americans another way to legally bet on the outcome of the presidential campaign, alongside earlier participants such as Kalshi, Interactive Brokers, and PredictIt. Regulated sportsbooks remain prohibited from offering similar betting markets.
Kalshi arguably paved the way for Robinhood, having successfully fought the U.S. Commodity Futures Trading Commission for the right to offer its election-related contracts. Quickly, though, the prediction market is facing new competitors using Kalshi’s legal successes to launch rival products.
Buy, sell, bet
That competition is also helping to push election betting into the mainstream, making gambling on politics akin to wagering on the rise and fall of stocks and bonds.
While U.S. election betting used to be common on Wall Street and among Americans on Main Street, it fell out of favor among regulators and lawmakers. Suddenly, it's back in vogue, and legal.
Robinhood became a go-to destination for retail investors during the “meme” stock frenzy that kicked up amid the COVID-19 pandemic. Those same traders may now decide to dabble more and more in betting on the latest U.S. election odds.
Robinhood telegraphed earlier this month that such a move could come via its derivatives business.
“Now [Robinhood Derivatives LLC] is following up on this announcement with the launch of presidential election event contracts, ahead of the November 5 general election,” the company noted on Monday.
