Is the event contract market getting ready to hit mainstream America? That may well be the case in the wake of a recent announcement of a deal between Robinhood, the online brokerage firm, and Kalshi, a major player in the events contract market, to partner on trades surrounding the outcome of Super Bowl LIX. It’s a big-time partnership that will likely not only grab the attention of American traders, but is also likely to garner plenty of attention from gaming regulators.
The partnership is a win-win for both Robinhood and Kalshi. For its part, Kalshi gets access to a Robinhood’s massive 25 million strong user base; which is a pretty sweet market expansion under any circumstances. Robinhood, on the other hand, gets a new product that’s powered by one of the biggest names in the event contracts market that’s ready-to-go.
Under the terms of the deal, Kalshi will be offering just one contract on Super Bowl LIX. Perhaps as an effort to keep things simple for new users, the only contract offered will be on the outcome of the game.
Event contract trading offers some distinct advantages over traditional regulated sports betting, particularly its ability to skirt the onerous regulatory process of getting licensed in each state. Robinhood is currently operating in all 50 US States.
A Robinhood representative described the Kalshi deal in comments reported on by Next.io saying, “With an emerging asset class like event contracts, we recognise an opportunity to better serve our customers as their interests converge across the markets, news, sports and entertainment.”
Though perfectly legal, the partnership between Robinhood and Kalshi is likely to spur greater scrutiny by gaming regulators regarding the difference between sports betting and investment.