In a collision of finance, fandom, and controversy, Robinhood is back in the crosshairs—this time for letting users wager on March Madness matchups through a new prediction market hub. And Massachusetts isn’t exactly cheering from the sidelines.
State regulators, led by Secretary of State Bill Galvin, have launched a formal probe into the trading platform’s latest venture, questioning whether Robinhood is blurring the already-thin line between investing and gambling. Galvin, never one to mince words, called the move “just another gimmick” aimed at luring young investors through flashy distractions tied to a cultural phenomenon.
“This isn’t investing. This is sports betting in a suit and tie,” Galvin warned in an interview. His office has already fired off a subpoena to Robinhood, demanding data on how many Massachusetts users have shown interest in betting on college basketball outcomes since the launch of the feature.
Robinhood’s new hub went live just as the NCAA men’s and women’s tournaments tipped off—timing that regulators found a little too convenient. The platform allows users to trade event contracts—essentially bets on real-world outcomes, whether it’s sports scores, political races, or economic indicators. Robinhood says these contracts are entirely above board, offered through a CFTC-registered exchange (KalshiEX), and fully compliant with federal oversight.
“Prediction markets have become increasingly relevant,” said a company spokesperson, brushing off the backlash. “We’re proud to offer retail customers access to them in a safe and regulated way.”
But not everyone’s buying it—especially after Robinhood recently pulled the plug on a Super Bowl-related event contract, reportedly under pressure from the Commodity Futures Trading Commission. That move only happened a day after launch.
Massachusetts regulators now want to know why Robinhood felt confident enough to green-light college basketball wagers weeks later, despite the CFTC’s earlier objections. Galvin’s subpoena asks for internal discussions and marketing materials tied to the NCAA rollout.
Adding to the intrigue is the political flavor: Kalshi’s board includes Brian Quintenz, a former CFTC official nominated under Donald Trump, and the company counts Donald Trump Jr. as a strategic adviser.
This isn’t Robinhood’s first legal tango with Massachusetts. Back in 2020, the state slammed the platform for encouraging risky trades through gamified tactics—think confetti explosions for every completed transaction. That case ended in a $7.5 million settlement in 2024, following an additional probe into a major data breach.
Now, with sports betting wrapped in a brokerage interface, the stage is set for round two. And for regulators like Galvin, Robinhood’s latest play isn’t just madness—it’s a full-court press on the line between speculation and seduction.
