Robinhood Tries to Rebrand Sports Betting as Investing

Robinhood has gotten a reputation as a platform where people make wildly speculative investments without sufficient guardrails. So it’s only right that it’s getting into the sports betting business. The company announced on Tuesday that it is launching “prediction markets” for college and professional football as part of a partnership with Kalshi.

According to the company, it’ll start listing “contracts” for NFL and NCAA games in the coming days, with plans to make each matchup open for two weeks prior to their kickoff. “Football is far and away the most popular sport in America,” JB Mackenzie, Vice President and General Manager of Futures and International at Robinhood, said in a statement. “Adding pro and college football to our prediction markets hub is a no-brainer for us as we aim to make Robinhood a one-stop shop for all your investing and trading needs.”

It’s a little funny and a lot sad that Robinhood is positioning the ability to put your money down on the outcome of football games as “investing.” But it’s certainly honest, albeit probably unintentionally so. The reality is that Robinhood wants you moving your money around because that is how it makes money, getting compensated for every transaction that it routes to market makers. That is why the app gamifies the experience, using dark pattern techniques to keep you betting that you can beat the market. By adding sports betting to the mix, it’s making clear that it’s as much a casino as a stockbroker.

Robinhood would disagree with that framing. In the press release announcing its football markets, the company specifically differentiates sports betting from its offerings. “Unlike sports betting, where the firm sets a line, event contracts leverage the power and rigor of financial market structure and are offered in a marketplace where buyers and sellers interact to set the price,” it argued. “Customers can access the contracts in real time and manage risk by adjusting–or exiting–their positions up to and throughout a game before a contract expires.”

Lots of states disagree, for what that is worth. At least seven states have sent cease and desist orders to Kalshi, telling the company to stop offering its prediction markets to their respective residents. Those states argue there is “no meaningful difference” between sports trading and sports betting, which seems kinda hard to argue. Sports “trading” is still effectively betting on the outcome of a game, just with shifting markets.

Kalshi, of course, thinks the difference is meaningful and has largely continued to operate unabated. It’ll probably win any challenge to its legality should it reach the federal level, given that the company handed a strategic advisor seat to Donald Trump, Jr., earlier this year. If you’re the gambling kind, it’s probably a safe bet that Kalshi can pull some strings.