Robinhood launches contracts to bet on US election amid the rising popularity of Polymarket and Kalshi

Robinhood announced on Monday that it will allow users to trade contracts speculating on the outcome of the upcoming U.S. presidential election, joining the competitive field of prediction markets.

The platform’s new offering enables users to potentially profit from correctly predicting the election results, marking Robinhood’s latest expansion into alternative trading products.

For this initial rollout, Robinhood will make election contracts available to a limited number of users who must be U.S. citizens with an active Robinhood individual investing account. These users must meet specific criteria, including approval for either margin investing or Level 2/3 options trading.

Through Robinhood’s election contracts, users can speculate on the outcome of the 2024 U.S. presidential race . To open a position, users select a candidate and buy “Yes” contracts, effectively wagering on that candidate’s win. Each contract’s value can range up to $1.00 but may fluctuate based on demand. The final settlement value will be $1.00 for correct predictions and $0.00 for incorrect ones, with payouts made on Jan. 8, 2025, after the U.S. Congress certifies the results on Jan. 6, 2025.

Closing a position involves purchasing an equivalent “No” contract to offset the “Yes” position, effectively allowing users to manage risk or lock in profits. Robinhood does not permit users to hold simultaneous “Yes” positions on multiple candidates.

A surge of interest in political prediction markets

Robinhood’s entry comes after prediction market platform Kalshi received a favorable ruling against the Commodity Futures Trading Commission at the beginning of October after a U.S. federal appeals court upheld a lower court's order that permitted New York derivatives trading platform KalshiEX LLC to list contracts that allow Americans to bet on election outcomes.

The CFTC had attempted to block Kalshi’s election contracts, arguing that such markets require regulatory oversight to prevent misuse.

While the CFTC is appealing the ruling, other major platforms, such as Interactive Brokers , have also launched political event contracts, signaling a rising demand for these speculative instruments.

On Monday, Kalshi CEO Tarek Mansour told CNBC, "We’re now number one on the finance App Store, and we’ve just overtaken Facebook and Uber on the global app store rankings... We’re aiming for number one across the entire app store by election day."

Discussing bet sizes on Kalshi, Mansour noted that average bets on Kamala Harris are slightly higher than those on Donald Trump, but more users are placing bets on Trump.

"The average bet on our platform is around $300 to $400, but some users are betting millions," he said.

When asked about the difference between Robinhood’s new event contracts platform and Kalshi, Mansour explained, "Kalshi offers nearly a hundred contracts with significantly higher liquidity. On Robinhood, you can place around $10,000 before impacting the price, but on Kalshi, you can bet millions without affecting market movement."

Prediction markets allow traders to buy and sell contracts based on the outcomes of future events, such as elections, economic reports or major policy announcements. These markets are considered high-risk relative to traditional assets but have grown in popularity as more investors seek new ways to diversify and engage with real-time events.

Prediction market platforms like Polymarket and PredictIt offer U.S. presidential election outcomes and event shares across a broader array of political and economic predictions. Polymarket’s contracts are priced between $0.00 and $1.00 USDC, representing the probability of various outcomes, while PredictIt allows users to buy and sell shares on political events with similar pricing structures.