Robinhood Markets Inc (NASDAQ:HOOD) saw early success with the launch of event contracts ahead of the 2024 presidential election. Now the company appears to be eyeing the sports betting space.
What Happened: Robinhood held its first Investor Day in New York on Wednesday. CEO Vlad Tenev made headlines when he suggested that an expansion into sports betting was on the table.
When Tenev was asked about the potential for Robinhood to venture into sports betting, he said the company is “keenly looking into that space,” per CNBC.
“Nothing to announce just yet, but it's so important to our customers and in culture that we're excited about it," Tenev said at the investor day event.
The sports betting talk comes after Robinhood’s launch of event contracts ahead of the 2024 presidential election, which saw strong traction. Robinhood said more than 400 million contracts were traded by over 500,000 Robinhood users.
Prediction markets, which let participants buy and sell contracts to each other, are different than sportsbooks that offer betting odds against the house. Robinhood would need to get approval from the Commodity Futures Trading Commission (CFTC) before it would be allowed to offer traditional sportsbook betting odds.
In a CNBC interview on “Squawk Box” Thursday morning, Tenev clarified his comments on sports betting. The Robinhood CEO explained that he believes his comments were “taken a little bit out of context,” although he didn’t rule out a swift move into the space.
“I wouldn’t expect us to launch sports betting soon. But I also wouldn’t rule it out,” Tenev said.
Shares of DraftKings Inc (NASDAQ:DKNG), Flutter Entertainment (NYSE:FLUT) and PENN Entertainment, Inc (NASDAQ:PENN) traded slightly lower on Tenev’s comments before bouncing back Thursday morning. At last check, DraftKings was up 0.74% at $45.10, Flutter was up 0.76% at $280.14 and Penn Entertainment was down 0.37% at $21.83, according to Benzinga Pro.
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Robinhood shares have more than tripled since the start of the year. The rally accelerated at the beginning of November as the company’s event contract offering soared in popularity.
November was an overall strong month for Robinhood with the company adding more than 400,000 users. Net deposits totaled $5 billion during the month and assets under custody grew to more than $190 billion.
Equity trading volumes were up more than 15% from October and up over 170% year-over-year. Crypto volumes jumped over 400% from October to November and rose over 600% year-over-year.
Robinhood said it will release its full November operating data next week.
HOOD Price Action: Robinhood shares were down 0.85% at $39.66 at the time of publication Thursday, according to Benzinga Pro.
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