Robinhood Enters Prediction Betting Market for 2024 Presidential Election With Harris and Trump Contracts

Robinhood Enters Prediction Betting Market for 2024 Presidential Election With Harris and Trump Contracts

Robinhood has officially announced its entry into the prediction betting market allowing users to trade contracts on the outcome of the 2024 presidential election just eight days ahead of Election Day. This significant development was made public on October 28 and comes at a time when the political prediction market is becoming increasingly competitive following a landmark ruling favoring Kalshi against the Commodity Futures Trading Commission CFTC.

With this new feature users can place wagers on whether Donald Trump or Vice President Kamala Harris will win the election provided they meet certain criteria including U.S. citizenship. The trading process will be facilitated through Robinhood Derivatives and ForecastEx a system managed by Interactive Brokers. Users stand to gain payouts of up to $5,000 for successfully predicting the winning candidate.

In its statement Robinhood emphasized the value of event contracts stating “We believe event contracts give people a tool to engage in real-time decision-making unlocking a new asset class that democratizes access to events as they unfold.” Initially only contracts related to the presidential election will be available on the platform.

The newly launched election betting feature enables users to purchase contracts priced between $0.02 and $0.99. These prices reflect the market-implied odds of each candidate winning. If a user successfully bets on the winning candidate they will receive a $1 payout per contract. The platform has also established a cap allowing users to buy a maximum of 5,000 contracts per candidate which equates to a potential payout of $5,000 for accurately predicting the winner.

Trading hours for this new feature will be extended leading up to Election Day starting at 8 a.m. EDT and closing at 8 p.m. EDT with hours potentially expanding further as the election date approaches. Users who place winning bets will receive their payouts in January 2025.

As the odds currently stand Trump leads in the prediction betting market allowing Robinhood to join other platforms such as Polymarket Kalshi and PredictIt thus contributing to the growing momentum of election betting this year.

These betting platforms have drawn regulatory scrutiny particularly from the CFTC which has expressed concerns about the potential effects of election wagers on voter behavior and election integrity. However a recent federal court ruling siding with Kalshi has established a legal precedent supporting the practice of election betting.

Unlike many U.S.-based platforms Polymarket operates internationally and does not face the same user restrictions. Recently it was reported that a single French user used four accounts to invest millions in Trump contracts. Nonetheless an investigation confirmed that there was no manipulation of the market.

As of now election betting markets reflect strong odds favoring Trump with Election Betting Odds estimating his chances of victory at 62%. This figure surpasses predictions from several polling-based models such as FiveThirtyEight which places Trump’s chances at 54% and Nate Silver’s Silver Bulletin which estimates them at 52.9%.

For Robinhood users this pricing indicates that a contract on Trump may open at $0.62 while a contract on Harris could be priced around $0.38. Those betting on Trump at these odds could potentially see a return of 60% while a Harris victory would offer a return on investment of 160%.