Robinhood Launches U.S. Prediction Betting as Election Day Nears

You can't legally place wagers on the outcome of the American election at our best sports betting sites in the United States. But for people looking to get some action on Election Day, there are options.

Trading platform Robinhood has introduced event contracts that allow users to predict the outcome of next week’s presidential race. The contracts began rolling out to a limited number of users on Monday, October 28. 

“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,” commented the company in its latest . 

Customers must be U.S. citizens and apply for and receive approval for a derivatives account with Robinhood. Once approved, users can trade based on their prediction of “who will win the 2024 presidential election,” choosing between contracts for Donald Trump or Kamala Harris. The 2024 presidential election contracts are the only options available to trade on the platform at present.

How do presidential election contracts work?

Event contracts are a type of prediction contract classified as swaps by the Commodity Futures Trading Commission (CFTC). Their value is determined by whether a particular event occurs within a specified timeframe based on a "yes" or "no" response to the event question.

Robinhood’s event contracts allow users to invest in their predictions regarding the outcome of the presidential election. Since respondents must choose either yes or no, there are two event questions: "Will Kamala Harris win the US presidential election in 2024?” and “Will Donald Trump win the US presidential election in 2024?” ChatGPT recently predicted a Harris victory.

Users can only own the “yes” contract for one candidate. If their chosen candidate is declared the winner when the contracts are resolved on January 7, 2025, they will earn $1 for every contract they hold. However, the contract will hold no value if their chosen candidate does not win.

Is election betting legal in the U.S.?

Placing real money bets on elections has long been illegal in the U.S. However, a recent court ruling lifted the CFTC's 2023 ban on election outcome trading. This change gave the prediction market Kalshi the green light to proceed with its political prediction-market contracts and become the country’s first federally regulated exchange to allow trades on event outcomes. Kalshi reported a surge in trading activity this week, with some users placing bets exceeding $20,000 on the election. North of the border, some of our best sportsbooks in Canada also accept wagers on markets related to the election.

As the political prediction market expands, concerns have emerged. For instance, the unregulated, cryptocurrency-based platform Polymarket recently conducted additional checks to verify that bettors were located outside of the U.S. following a spike in pro-Trump bets. However, an investigation later revealed that the trading was not manipulating the market.

Last week, the CFTC also announced that it is taking on the unofficial role of “elections cop” to oversee political derivative markets, despite its ongoing efforts to shut down such sites.

“A district court in D.C. made a decision just over a month ago, and we did appeal to the court of appeals for a stay on the actual contracts. Both were denied. We respect those decisions and we will regulate those markets as best we can,” said agency Chairman Rostin Benham.