Digital trading platform Robinhood will allow customers to place bets on the outcome of the presidential race through event-specific trading contracts.
The new product will let customers pick contracts associated with victories for either Vice President Harris or former President Trump.
“Customers will be able to trade based on their prediction for ‘who will win the 2024 presidential election.’ There will be two contracts to choose from — one for Kamala Harris and one for Donald Trump,” the company said in a Monday news release.
Shares of Robinhood were up more than 3 percent during the Monday trading session, rising to $27.95 as of 2:13PM.
The new trading contracts from Robinhood are a type of derivative offered through Robinhood Derivatives, LLC, a futures commission merchant registered with the Commodity Futures Trading Commission (CFTC), the company said.
Derivatives are a type of investment based on the value of an underlying asset — in this case, one of the contracts associated with an election win for Trump or Harris.
“We believe event contracts give people a tool to engage in real-time decision-making, unlocking a new asset class that democratizes access to events as they unfold,” Robinhood said.
A federal judge in September decided to allow betting on elections through the use of derivatives, delivering a blow to regulators at the CFTC. The decision was affirmed by the U.S. District Court for the District of Columbia in October.
In May, CFTC Chair Rostin Behnam commented on how his agency defined gaming as including “the outcome of a political contest, the outcome of an awards contest,” and “the outcome of a game in which one or more athletes compete.”
Interest in retail betting platforms has been increasing in recent years.
Americans bet $119.84 billion on sports in 2023, an increase of 27.5 percent from 2022, according to the American Gaming Association’s commercial gaming revenue tracker, as reported by S&P Global.
“AGA executives attributed the overall industry improvement to a legal sports betting footprint that has expanded to 38 states and the District of Columbia,” S&P Global reported earlier this year.
