Robinhood launched a prediction markets hub that allows users to bet on a range of sports and political outcomes — just in time for college basketball's March Madness frenzy. The new feature is part of Robinhood's expansion strategy to become the go-to broker for the next generation of investors.
Robinhood on Monday afternoon launched a prediction markets hub within the Robinhood App. The feature allows users to wager on the outcomes of major real-world events, ranging from sports and politics to economics. Robinhood partnered with KalshiEX LLC, a Commodities and Futures Trading Commission-regulated exchange for the new feature.
"We believe in the power of prediction markets and think they play an important role at the intersection of news, economics, politics, sports and culture," said JB Mackenzie, GM of Futures and International at Robinhood. The stand-alone prediction markets hub also allows the company to better-serve customers as they look to engage with events that align with their interests, Robinhood said in the release.
Prediction Betting
Prediction markets trade contracts based on certain outcomes. At launch, Robinhood users can trade contracts for the what the Federal Reserve's target funds rate will be in May, as well as the upcoming men's and women's NCAA College Basketball Tournaments.
Users receive $1 for each contract they own if the prediction is correct.
For example, fourth-seed Purdue takes on 13th-seed High Point in the men's March Madness tournament on March 20. At the time of writing, contracts predicting a Purdue win currently cost 77 cents in the Robinhood app, and will result in a $1 payout if the Boilermakers make it to the Round of 32. Contracts for a High Point win cost 25 cents, for a profit of 75 cents if the team can pull off an upset.
The prices of the contracts can fluctuate based on supply and demand, and how increasingly likely one outcome appears. If High Point manages to have a 20-point lead with 2 minutes remaining in the game, the contract will be more expensive than 25 cents.
Robinhood plans to add more prediction contracts for future events.
Expansion Strategy
The prediction markets hub is Robinhood's latest expansion. The company has a goal to become a one-stop financial ecosystem for younger investors, and wants to offer as many products as possible to attract them. Robinhood in 2024 announced a number of acquisitions, bulked up premium offerings and launched a new desktop platform for active traders.
The broker hopes to capture a sizable share of the estimated $84 trillion in assets owned by older generations that will transfer to younger generations over the next two decades.
About half of Robinhood's customers are millennials, around 25% are Gen Z and 20% Gen X. Roughly 80% make over $50,000 in annual income, company data shows.
Robinhood Stock
HOOD stock fell 4.6% Tuesday.
Robinhood stock jumped 7% Monday following the afternoon announcement. Shares have tumbled from their Feb. 13 high of 66.91. Still, HOOD stock is up almost 8% in 2025.
Robinhood has a 21-Day ATR % of 12.78.
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In the current, unpredictable market, IBD suggests stocks with ATRs of 3 or below.
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