Robinhood Partners with Kalshi to Launch Prediction Markets

Robin recently launched a prediction market center in partnership with Kalshian exchange regulated under the Commodity Futures Trading Commission (CFTC). This new feature allows Robinhood users to exchange contracts according to the results of various real world events, such as sports, policy and economic indicators. The HUB made its debut with offers such as contracts on the target interest rate of the Federal Reserve for May and the NCAA male and female basketball tournaments, aligning on the moment of March Madness.

This decision expands Robinhood’s offers beyond traditional actions and crypto, by supporting the growing popularity of prediction markets in the United States, collaboration with Kalshi, which won a legal battle in 2024 to offer elections related to elections, ensures regulatory conformity while providing exchanges on the exchange of events to the 25 million users of Robinhood. The legal battle of Kalshi focuses on his fight with the US commodity committee (CFTC) on the right to offer contracts for political results, in particular congress control contracts which allow users to bet on the American chamber or the Senate party after an election.

In June 2023, Kalshi, a prediction market based in New York registered as an designated contractual market (DCM) under the CFTC, asked for approval to list these contracts. The CFTC rejected them in September 2023, arguing that they constituted “Games” or the game – activities he believed to be illegal under the Law on the exchange of raw materials (CEA) and against the public interest. The agency feared that such contracts would decrease the integrity of the elections, encourage manipulation or blurs the border between financial markets and bets.

Kalshi retaliated, continuing the CFTC in November 2023 in the American District Court for the Columbia District. He said the CFTC has exceeded its authority, calling for the decision “Arbitrary, capricious and contrary to the law” under the law on administrative procedure. Kalshi argued that his contracts did not play, but financial instruments linked to economically significant events – elections – that people could use to cover risks or better understand future results. They highlighted examples such as companies hiding against policy changes or researchers using market data to predict trends more precisely than polls.

September 12, 2024, judge of the district court Jia COBB ruled in favor of Kalshi, granting a summary judgment and canceling the prohibition of the CFTC. COBB noted that the CFTC misinterpreted the “game” in CEA, noting that the elections are not illegal games or activities but civic processes with major economic impacts. She rejected the concerns of CFTC’s public interest as speculative, saying that the agency could not prove concrete damage. The CFTC has not fallen, using the DC Circuit Court of Appeals And seek an emergency to prevent Kalshi from offering contracts during the call. Initially, the Court of Appeal published a temporary administrative suspension, but on October 2, 2024, it denied the CFTC’s request for a longer stay.

Judge Patricia Millett wrote that the CFTC had not shown it, or that the public would suffer “Irparable injury” Without the stay, even if she called the underlying merits “Close and difficult.” This Kalshi in Green will launch its electoral contracts before the American presidential election of 2024, and he did it quickly, listing the contracts on everything, from the control of the Congress to the presidential results. The CFTC call was still pending at the beginning of 2025, with oral arguments heard by the DC circuit on January 17, 2025. Meanwhile, Kalshi widened his offers, and at the end of 2024, he would have seen more than a billion dollars of shops related to the elections.

The CFTC continues to argue that these contracts threaten the integrity of the elections, while Kalshi includes that they have proven to be precious – offering lighter signals than surveys during the 2024 race, without proof of manipulation. The result of this battle could reshape the prediction markets. A victory for Kalshi could open the valves for other platforms to offer similar contracts, which questions the regulatory scope of the CFTC. A CFTC victory could tighten restrictions, pushing these markets offshore to unregulated spaces like Polymarket. Beyond federal rules, state regulators could always prohibit these contracts locally, adding another layer of complexity. For the moment, Kalshi is working, but the fight is far from over.