Kalshi, Robinhood announce March Madness partnership

Kalshi and Robinhood Partner to Expand Sports Contract Offerings Ahead of NCAA Tournaments

In a strategic move that signals a growing trend in the gambling landscape, Kalshi, a regulated exchange for event contracts, has partnered once again with Robinhood, the popular investment platform, to introduce sports contracts in anticipation of the NCAA men’s and women’s basketball tournaments. This collaboration, announced on March 17, positions Robinhood to launch a dedicated prediction market hub within its app, facilitated through Kalshi’s technology. With Robinhood boasting nearly 25 million users as of last November, this development marks a significant step in integrating sports betting into mainstream finance.

The initial offerings will include contracts tied to key matchups in the NCAA tournaments, commencing on March 18 for the men’s tournament and March 19 for the women’s event. Additionally, contracts will be available for predictions regarding whether the Federal Reserve will adjust the federal funds rate in its upcoming May meeting. These diversified offerings underscore the expanding horizons of prediction markets, particularly in the context of major sporting events.

The recent collaboration follows a previous partnership earlier this year focused on Super Bowl contracts, which encountered regulatory hurdles from the Commodity Futures Trading Commission (CFTC), causing Robinhood to withdraw from immediate participation. Meanwhile, Kalshi and Crypto.com continued to operate their Super Bowl contracts seamlessly, demonstrating the resilience of the prediction market ecosystem. This time around, Robinhood appears poised to re-enter the space with renewed vigor.

“We have maintained open lines of communication with the CFTC over the past several weeks and are eager to continue this dialogue to foster innovation within the futures, derivatives, and cryptocurrency markets,” stated a Robinhood representative. “These contracts will commence distribution today, and eligible customers will gain access in the upcoming days.”

Kalshi CEO Tarek Mansour expressed enthusiasm on social media, highlighting the team’s commitment to listing contracts for every March Madness game. Mansour noted the significant collaboration between both companies, emphasizing the hard work that has gone into ensuring a smooth launch. In a tweet, he credited his team – including Lior, Rainer, Noah, and others – for their dedication, stating, “The Robinhood engineering team was working in lockstep with us to ensure a seamless market opening.”

Regulatory Landscape: Kalshi’s Recent Cease-and-Desist Extension

The announcement of this partnership coincides with Kalshi’s recent acquisition of an extension from the Nevada Gaming Control Board (NGCB) regarding a cease-and-desist order issued on March 4. The original directive mandated that Kalshi cease operations within the state by March 14, with regulators warning of potential civil and criminal penalties for any continuance. In response, Kalshi submitted a request for more time to comply, which the NGCB granted but without providing extensive details.

The NGCB’s initial ruling declared that prediction markets, which encompass election wagering, are deemed “unlawful in Nevada unless approved as licensed gaming.” This represented a pivotal moment in regulatory oversight concerning prediction exchanges and their operations within specific states.

Uncertain Federal Regulations Surrounding Prediction Markets

On a broader scale, the future of prediction markets remains equivocal from a federal perspective. Last fall, Kalshi successfully navigated legal challenges posed by the CFTC in federal court, leading to an influx of billions in election contracts during the November elections. The evolution into sports outcomes has drawn considerable attention within the gaming industry, with Kalshi quickly capitalizing on major U.S. sporting events like the Super Bowl and March Madness, which are among the most significant betting events of the year.

While the CFTC initially indicated a commitment to curtailing such markets, dynamics appear to be shifting in 2025. Notably, Donald Trump Jr. has stepped into an advisory role at Kalshi, and former Kalshi board member Brian Quintenz has been nominated as the CFTC’s next chairman. This influence may signal a changing tide regarding regulation and potential market expansion.

Furthermore, the CFTC has announced plans for an upcoming roundtable discussion on prediction markets, having received over 20 submissions prior to this meeting. The majority of responses came from tribal interests, strongly opposed to what they perceive as an infringement on their regulatory exclusivity. Notably, there has been less feedback from industry operators, which may reveal a cautious optimism regarding potential business opportunities moving forward. For instance, DraftKings is reportedly exploring its own prediction market initiative, “DraftKings Predict,” through a pending application with the National Futures Association (NFA).

As the landscape of prediction markets evolves, with significant players like Kalshi and Robinhood at the forefront, industry stakeholders are well-advised to stay informed about regulatory developments while exploring innovative avenues for growth in this nascent sector.