NEW: Robinhoods Sly Sports Betting Move Gets Annihilated By Regulators Before Super Bowl…

Robinhood just got caught trying to launder sports betting through a finance bro filter, and the CFTC shut that sh*t down before it even got started. The brokerage had barely rolled out its “Pro Football Championship Market”—which, let’s be honest, was just a dressed-up sportsbook—before regulators swooped in and told them to cut the crap.

(Source: Giphy) 

The idea was simple: users could buy a “Yes” contract on either the Chiefs or Eagles for the Super Bowl. If their team won, the contract paid out $1 per contract. If they lost, the contract expired worthless. Sound familiar? That’s because it’s literally just sports betting, but with a little Wall Street polish. Robinhood, ever the disruptor of turning retail investors into casino addicts, tried to pass this off as “event contracts”—a niche area of derivatives trading where traders bet on real-world events like elections or economic data. But again, the CFTC wasn’t buying it.

Robinhood, in its usual “we don’t know why everyone’s so mad” tone, put out a statement claiming they were “disappointed” and that they had been in “regular communication” with the CFTC about this. However, this isn’t some tragic misunderstanding where Robinhood tried to innovate and got smacked down by Big Regulation. This is yet another example of Robinhood pushing the boundaries of what’s legal, getting caught, and then playing the victim. GameStop? Payment for order flow? The SEC breathing down their neck every other week? It’s like they’re addicted to regulatory attention at this point.

(Source: Quartz) 

What’s more is that the CFTC made it clear they weren’t about to let a brokerage turn into DraftKings with candlestick charts. The agency said it had “serious concerns” about futures commission merchants offering potentially unlawful contracts. Which to be fair, in the world of financial services–it could dicey real fast.

But, but, but… with that said, Robinhood isn’t just throwing ideas at the wall for fun—it’s hunting for new revenue streams. The stock is actually having one of its best runs in years, up 37.25% year-to-date and trading around $57. But long-term, Robinhood knows it needs to keep expanding beyond just stock and options trading if it wants to maintain momentum.

(Source: Wall Street Journal) 

First, they pushed into retirement accounts (because sure, the same people YOLOing weekly Tesla calls are definitely thinking about their golden years). Then, they launched credit cards to squeeze more engagement out of their user base. Now, it’s sports betting-adjacent gambling—because if retail traders love anything, it’s gambling in disguise.

The thing is, this play kind of makes sense. Sports betting is a $100+ billion industry and growing like crazy. Robinhood already has a user base that thrives on high-risk, high-reward speculation—so why not give them a way to legally bet on sports without making them open a separate DraftKings or FanDuel account? If they had pulled this off, they’d have been the first brokerage to blur the line between trading and gambling at scale—which, depending on your perspective, is either brilliant or terrifying.

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However, despite the setback, investors aren’t panicking. Robinhood’s stock barely flinched on the news, and for good reason: the company is successfully reinventing itself. After years of being written off as a meme-stock era relic, Robinhood is proving it can evolve beyond its original business model (while attracting regulation in the process). 

Yet, with the company’s mix shifting, and interest income and new product lines driving growth instead of just pure trading volume—this is exactly what Wall Street wants to see. If Robinhood had relied solely on retail trading, its stock would still be stuck in the gutter. Instead, it’s up 37% this year, outperforming most of the market. In the end though, Robinhood isn’t giving up on the idea, they’re just regrouping. The company already said it plans to launch a “comprehensive event contracts platform” in 2025, meaning they’re going to repackage this idea, slap some more legalese on it, and try again.

(Source: Giphy) 

Meaning, when it comes down to it, Robinhood is still the king of making markets “fun” for retail traders. Sure, it’s an L, but when your stock is absolutely melting-faces off—no one is complying. For now, keep an eye on Robinhood and this “event-contract” development. And as always stay safe and stay frosty, friends! Until next time… 

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Stocks.News holds positions in Robinhood and Tesla as mentioned in the article.