Robinhood Ends Super Bowl LIX Bets Plan After CFTC Complaint: 'Work To Roll Out A More Comprehensive Contracts Platform Later This Year'

A plan by Robinhood Markets HOOD to offer event contracts for Super Bowl LIX has ended after pressure from the Commodity Futures Trading Commission.

What Happened: Robinhood's planned launch of more sports event contracts through a partnership with Kalshi was expected to come in time for Super Bowl LIX with the Kansas City Chiefs and Philadelphia Eagles battling for the NFL championship on Feb. 9.

Robinhood has ended its battle after receiving a formal request from the CFTC.

"The Commodity Futures Trading Commission has formally requested that Robinhood Derivatives LLC ‘not permit customers to access' sports event contracts," Robinhood said in a statement.

The company said it is suspending the rollout of the Pro Football Championship market, which was available to around 1% of customers currently. Existing trades by customers are expected to have the option to close the positions out or see them through to a resolution on the game.

"We are disappointed by this outcome, especially given that we had been in regular communication with the CFTC about our intent and plans to offer this product. We've also taken steps to advocate for balanced regulation in the futures and derivatives markets, including participating directly in a CFTC roundtable, providing written feedback to the CFTC, and generally championing the economic benefits of event contracts," stated Robinhood.

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Why It's Important: The withdrawal of the event contracts on the Super Bowl could prove beneficial to sports betting companies such as DraftKings Inc DKNG and Flutter Entertainment FLUT unit FanDuel, which dominate the U.S. market.

The Super Bowl is the most watched sporting event in the U.S. and one of the most bet on sports contests in the country.  

While Kalshi is regulated by the CFTC, the prediction market is not able to list contracts that include gaming, a vague area that has led to disputes and likely ended the Robinhood launch, as reported by the Wall Street Journal.

The CFTC is reviewing Super Bowl contracts issued by Kalshi and Crypto.com.

Robinhood said it will continue to collaborate with the CFTC in the future.

"As we work to roll out a more comprehensive event contracts platform later this year."

Robinhood said it was considering expansion into sports betting at its December Investor Day event.

"I wouldn't expect us to launch sports betting soon. But I also wouldn't rule it out," Robinhood CEO Vlad Tenev later clarified while saying his Investor Day comments may have been taken out of context.

The company previously offered event contracts for the 2024 presidential election, which saw strong demand with more than 400 million contracts traded by over 500,000 Robinhood users.

HOOD Price Action: Robinhood stock is down 0.25% in after-hours trading to $52.45 on Tuesday after shares closed up 1.31% to $52.58. The stock has traded between $10.51 and $53.51 over the past year with shares up 398% over the last 52 weeks.

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