Robinhood and Kalshi are launching the first-ever prediction market for March Madness

Fans of basketball and financial misfits will find March 18, 2025, a big day. Robinhood, the groundbreaking trading app, teamed up with prediction market platform Kalshi to launch a new betting hub for real-world events, starting with the NCAA March Madness tournaments. As brackets get filled out and office pools heat up, Robinhood users can now trade on the outcomes of the match in an easy and regulated way. This move is a massive step in merging sports and trading; it will help combine one’s passion for sports with money trading. 

A New Way to Play the Bracket Game

Robinhood’s new game isn’t stocks, it’s predicting winners. Users can use the new prediction market to sell and purchase contracts linked to the NCAA Basketball tournaments. Both men’s and women’s tournaments start this week. Looking to put money on whether your underdog team will pull off an upset or whether a top seed will crash out? You can bet on the Robinhood app itself. Yes, you heard that right. The creators of this setup are powered by a Commodity Futures Trading Commission (CFTC), a regulated exchange called Kalshi.

Betting on the NCAA Tournament is incredibly easy to understand and appeals to many people. You’re not betting on a team. Instead, you are betting on yes-or-no outcomes. For instance, “Will Team X make it past Sweet 16?” Each contract has a tiny price of two cents, which is shared between Robinhood and Kalshi. This keeps the stakes low for casual fans but juicy enough for bettors. This method is very different from traditional sports betting, which is heavily regulated on a state level. This option is open to users across the States and not just in gambling-friendly places like Nevada.

Why Prediction Markets Are Heating Up

Prediction markets have been around for a while now. However, their popularity seems to have escalated, with Kalshi and Polymarket correctly predicting the outcome of the 2024 presidential election while the polls went haywire. The concept is straightforward: when individuals place real-money bets, they unveil their thoughts and beliefs, beyond mere opinion and gut feelings. Now, Robinhood is utilizing that momentum for a bigger audience with a name they can trust and a top-tier app.

Robinhood's hub isn't just looking at sports. First offerings also feature contracts for economic happenings, such as when and where the Federal Reserve might land on interest rates in May. It signals the intent to create a year-long establishment instead of a one-time gig. Kalshi CEO Tarek Mansour told Front Office Sports, “There’s nothing more exciting than participating in prediction markets during unpredictable times. And there is perhaps no event with more unpredictability than March Madness.”

Navigating the Regulatory Maze

This isn’t the first time Robinhood has entered prediction markets. Last month, they offered Super Bowl contracts through Kalshi but reversed course after some CFTC headwinds. This time, they are going all-in with a dedicated hub, and the CFTC approved it for the deal. Kalshi's successful resolution of their CFTC lawsuit last year, granting them the ability to offer election betting, indicates that they can handle regulatory scrutiny and pressure.

Still, not everyone’s on board. Nevada gaming regulators slapped Kalshi with a cease-and-desist order because its contracts look too much like unlicensed betting. Kalshi is pushing back and has an extension to respond for now. Prediction markets are becoming more popular, but this shows they must still be careful with what they do. However, for users on Robinhood outside of Nevada, it’s full steam ahead.

What’s in It for Users and Robinhood?

This is a fun sandbox for the average Robinhood user, think younger and tech-savvy folk who already trade stocks or crypto. It is providing some extra entertainment on top of the thrill that comes with your favorite team. If you can fill out a bracket, you can probably do this. You don’t have to be a Wall Street genius to play. With 25 million users, Robinhood's giving Kalshi a giant megaphone also helps to magnify a market that has been in a niche lately.

Robinhood is not doing this blindly. According to Cointelegraph, a 5% increase in stock indicates plenty of profits. That penny-per-contract charge may not sound much, but it builds up quickly with millions of trades. Also, it is an app that people will use regularly for various things, not just stocks.

The Bigger Picture

This partnership could change things for March Madness and how we view markets and entertainment. Axios notes that competition like Polymarket, which took in $3.6 billion of bets on the election, is paying attention. Robinhood's launch could trigger a surge in prediction markets, attracting participants from sports fans to economics enthusiasts. Kalshi plans to expand into diverse politics, weather, and pop culture areas. It’s not hard to imagine a day when your app is not just for buying Tesla shares, but betting on who will win an Oscar.

Conclusion

Robinhood and Kalshi's March Madness prediction markets are nearly ready for action, combining the chaos of the tournament with the thrill of trading. It's a massive step off the beaten path but has regulatory approval and millions of potential customers. If you are a die-hard fan or enjoy a good bet, this hub offers another way. As the games continue and the brackets are destroyed, one thing is sure: the line between sports and finance has become a little blurry and fun.