Robinhood Pauses Super Bowl Event Contracts After CFTC Request

The stock trading app company Robinhood on Tuesday halted the offering of its even contracts on the outcome of the Super Bowl. This followed a request from the US Commodity Futures Trading Commission (CFTC) asking the platform to remove the market.

The request came just a day after the market was first offered on Robinhood, which is one of several platforms offering predictive markets on a variety of world events following a court decision that allowed marketplaces under the regulation of the CFTC to offer markets on the 2024 US elections and similar events. 

Robinhood ‘Disappointed’ by CTFC Pushback

In a statement, Robinhood said that the suspension of the market came before most users had a chance to access it.

“We have rolled this product out to roughly 1% of our customers, and for those who already placed trades, we plan on providing the option to close their positions or take them to resolution,” Robinhood said. “We are disappointed by this outcome, especially given that we had been in regular communication with the CFTC about our intent and plans to offer this product.”

Robinhood general counsel Lucas Moskowitz said that the firm made the decision “despite the fact that the CFTC has not deemed Kalshi’s football championship contracts illegal,” according to a Reuters report.

Instead, the CFTC could be questioning whether an offering on the Super Bowl strays into questions of regulatory jurisdiction. Sports betting is currently overseen on a state-by-state basis, with each jurisdictions determining what companies are licensed to offer bets, and what kinds of wagers are available.

Experts have also suggested that the CFTC may be concerned about how adding sports contracts to prediction markets could alter the landscape of the expanding events derivatives industry. 

“The CFTC may be concerned that this could be perceived as an active retail betting platform disguised under an investment umbrella, especially since sporting events are much more frequent than presidential elections,” Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors, told Reuters. 

Chiefs Remain Slight Favorite in Super Bowl 59

Robinhood launched its Super Bowl event contracts as the “Pro Football Championship Market,” offering contracts on whether the Kansas City Chiefs or the Philadelphia Eagles would win Super Bowl 59 on Sunday, Feb. 9. The game is taking place at the Caesars Superdome in New Orleans.

At traditional sports betting sites, the Chiefs are seen as a slight favorite in Sunday’s game. Typical American odds have the Eagles at +100 to win the Super Bowl – the equivalent of a $0.50 contract on a predictive marketplace where successful contracts pay out at $1 each – while Kansas City is commonly listed at -120 ($0.55). For those who prefer to bet on the point spread, the Chiefs are a slim 1-point favorite.