Robinhood’s (HOOD) stock jumped 8% after announcing a major expansion into betting markets. The brokerage has partnered with Kalshi, a CFTC-regulated prediction market, to let users trade event contracts. Investors reacted quickly, sending shares higher on the Nasdaq.
What Robinhood’s New Platform Offers
Robinhood’s platform allows users to trade event contracts on real-world topics. That includes the Federal Reserve’s next interest rate decision, the men’s and women’s College Basketball Tournaments, and more. The partnership with Kalshi expands Robinhood’s footprint in prediction markets, where it now competes with blockchain-based rival Polymarket.
Regulatory Challenges Loom
This isn’t Robinhood’s first attempt at event contracts. In October, it tested political betting. By November, U.S. election-related prediction markets had already seen $4 billion in trades. But regulators are paying attention. In February, the CFTC forced Robinhood to suspend Super Bowl betting. Its partner, Kalshi, has also faced legal battles over political event contracts.
Robinhood’s latest move is risky. But with billions already flowing into prediction markets and crypto revenue surging 700% last quarter, the company sees a major opportunity. With this new launch, it is clear that Robinhood is capitalizing on the surge in event-driven trading.
Is HOOD Stock a Good Buy?
Analysts remain cautiously optimistic about HOOD stock, with a Moderate Buy consensus rating based on 14 Buys and five Holds. Over the past year, HOOD has increased by more than 125%, and the average HOOD price target of $70.94 implies an upside potential of 76.9% from current levels.
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