Stock trading platform Robinhood expands into prediction markets for football games, files lawsuit against New Jersey regulatory body

In a move to broaden its horizons, Robinhood, the popular financial services platform, has announced its entry into the sports prediction market. This strategic shift comes as the company reported nearly one billion contracts traded in Q2 2025, with a significant portion of transactions being in sports-related prediction markets.

Robinhood's foray into sports prediction markets is not without competition, as established players like FanDuel and DraftKings dominate the US market. However, the limited competition in this space presents an opportunity for Robinhood to carve out a niche.

To facilitate this new offering, Robinhood has partnered with the regulated exchange Kalshi. This partnership allows customers to trade contracts on the outcomes of professional and college games from all Power 4 conferences and independent schools. At launch, contracts will cover the opening two weeks of the football season, with weekly matchups added as the season progresses.

Traders can enter, adjust, or exit positions up to and throughout a game before contracts expire, providing a dynamic and engaging experience for users.

The expansion into sports prediction markets is a reflection of Robinhood's focus on this sector, given its popularity among users. In fact, sports remain a key focus for Robinhood, as evidenced by the addition of professional and college football to its Prediction Markets Hub.

Robinhood's CEO, Vlad Tenev, has emphasised the cultural significance of betting to customers, viewing it as a bridge between finance, culture, and sport.

However, Robinhood's entry into the sports prediction market has not been without controversy. In March, the New Jersey Division of Gaming Enforcement (NJDGE) issued cease-and-desist orders to Robinhood and its partner Kalshi over alleged violations of state sports wagering laws.

In response to the NJDGE's refusal to agree not to take enforcement action against Robinhood, the company has reactivated access to sports contracts for its New Jersey customers. Furthermore, Robinhood has filed a lawsuit against the NJDGE to protect its business and customers from potential criminal and civil penalties.

Precedent for this legal battle lies in previous court rulings that found New Jersey law was likely preempted by the Commodity Exchange Act (CEA) in cases involving Kalshi. This could potentially set a precedent for Robinhood's case.

Some speculate that acquisitions may be the only viable route for Robinhood to gain traction in the competitive sports prediction market. However, Robinhood's goal remains clear: to enable anyone, anywhere, to trade, invest, or hold any financial asset and conduct any financial transaction through Robinhood.

The lawsuit seeks a permanent injunction and declaratory relief to prevent New Jersey from enforcing its state gambling laws against Robinhood's sports-related event contracts. As the legal battle unfolds, Robinhood continues to push the boundaries of finance and culture, bringing new opportunities to its users.