Robinhood’s CEO, Vladimir Tenev, recently indicated that the company is actively considering venturing into sports betting, inspired by its successful introduction of election contracts. During a nearly four-hour Investor Day 2024 event, Tenev was asked about Robinhood’s potential expansion into new betting markets.
On October 29, Robinhood introduced its election contracts, just before the U.S. presidential election on November 5. In an impressive turnaround, from the idea’s inception to product launch took only two weeks, during which $500 million was traded in the contest between then-president-elect Donald Trump and outgoing Vice-President Kamala Harris. A surge in activity saw around 500,000 people open accounts to participate in these contracts, fueling speculation that Robinhood might soon explore the sports betting market.
In total, 507 million contracts were executed during the election, according to Robinhood. The company’s ability to offer election contracts stemmed from its license with the Commodity Futures Trading Commission (CFTC), despite sportsbooks being unable to offer these markets in the U.S.
When asked if this success could pave the way for sports betting through event contracts, Tenev confirmed Robinhood’s interest in exploring such opportunities. He explained that while election contracts differ from sports betting due to regulation under their Futures Commission Merchant license by the CFTC, there is significant interest in potentially providing contracts on sporting events.
Tenev further noted that Robinhood’s customer base, largely comprising Millennials and Gen Z, shows considerable interest in sports, making the prospect worth investigating. Although no new products are ready for launch at present, the company is closely examining possibilities in the sports betting arena. Tenev emphasized that Robinhood prefers to reveal new products at dedicated events rather than during investor meetings.
The Investor Day presentation highlighted that roughly 50% of Robinhood’s users are Millennials, with almost 25% identified as Gen Z. This demographic is generally well-off, with around 45% earning over $100,000 annually. Robinhood’s brokerage now hosts 24.4 million funded customer accounts, reflecting a year-over-year increase of 1.1 million accounts.
Chris Grove, a partner emeritus at Eilers & Krejcik Gaming, previously suggested that Robinhood likely won’t halt its expansion with election betting, pointing to a need for tapping into lucrative growth areas. The topic of Robinhood’s potential move into sports betting also featured in a recent EGR Big Debate, where experts like Rivalry’s Cody Luongo and Circle Squared’s Clyde Harris explored the implications.
Robinhood, founded in 2013, initially aimed to revolutionize the U.S. retail brokerage sector by offering commission-free trading through its mobile-only platform. The company has also extended its presence to the UK and plans further expansion into Asia by 2025. Following these developments, Robinhood’s stocks rose by 3.5%, reaching $40 on Nasdaq.