Robinhood tries to rename sports betting as an investment

Robinhood has obtained a reputation as a platform where people make extremely speculative investments without sufficient guards. It is therefore just that it starts in the sports betting sector. The company announced Tuesday that it launched “prediction markets” for university and professional football as part of a partnership with Kalshi.

According to the company, he will start to register “contracts” for the NFL and NCAA games in the coming days, with plans for each match to open for two weeks before their kick -off. “Football is by far the most popular sport in America,” said JB Mackenzie, vice-president and general manager of Futures and International in Robinhood, in a statement. “The addition of professional and collegial football to our prediction market hub is obvious for us because we aim to make Robinhood’s dress a one -stop shop for all your investment and trading needs.”

It’s a bit funny and very sad that Robinhood positions the ability to repress your money on the result of football matches as “investment”. But it is certainly honest, although probably involuntarily. The reality is that Robinhood wants you to move your money, because that is how it earns money, remunerating for each transaction that it transports market manufacturers. This is why the application is gaming the experience, using dark patterns techniques to keep you betting that you can beat the market. By adding sports betting to the mixture, it is clear that it is as much a casino as a valley broker.

Robinhood would disagree with this framing. In the press release announcing its football markets, the company specifically differentiates sports betting from its offers. “Unlike sports betting, where the company establishes a line, event contracts take advantage of the power and rigor of the financial market structure and are offered on a market where buyers and sellers interact to fix the price,” he said. “Customers can access contracts in real time and manage the risks by adjusting – or by leaving – their positions up to and throughout a game before the expiration of a contract.”

Many states do not agree, for what it is worth. At least seven states have sent orders to stop and abstain from Kalshi, telling the company to stop offering its prediction markets to their respective residents. These states argue that there is “no significant difference” between sports trading and sports betting, which seems a bit difficult to argue. Sports “trading” always bet on the result of a game, just with changing markets.

Kalshi, of course, thinks that the difference is significant and has largely continued to operate tirelessly. He will probably gain a challenge to its legality if it will reach the federal level, since the company has given a seat as a strategic advisor to Donald Trump, Jr., earlier this year. If you are the kind of game, this is probably a sure bet that Kalshi can pull some strings.