Robinhood and FanDuel are taking a bold step into an emerging financial product that fuses sports betting with market speculation: event contracts.
In August, Robinhood introduced event contracts for college and professional football. FanDuel followed with plans to offer similar products—only theirs target financial markets like stocks, bitcoin, oil, and gold. Both platforms aim to let users predict outcomes on a yes-or-no basis: Will gold close above $3,500 tomorrow? Will the Eagles beat the Cowboys on September 4?
These contracts don’t fall neatly into traditional regulatory categories. They’re not formally classified as wagers or investments and are overseen by the Commodity Futures Trading Commission (CFTC), which regulates futures markets—not gambling or securities.
Regulatory Gray Area Raises Red Flags
This lack of classification has triggered alarm bells across industries. The American Gaming Association (AGA) sees event contracts on sports as a form of gambling—and believes they should be regulated accordingly. AGA CEO Bill Miller warned against allowing such products to operate through “financial loopholes.”
The NBA also voiced its concerns. In a letter to CFTC Acting Chair Caroline Pham, the league argued, “the integrity risks posed by sports prediction markets are more significant and more difficult to manage than those presented by legal, regulated sports gambling.”
Joel Simkins, a longtime gaming analyst and founder of XST Capital Group, said the industry is evolving quickly. “The product that you are going to see on prediction markets is already evolving very rapidly and what you see this season could look completely different by the next NFL season if not sooner,” he said.
Legal Disputes Erupt Over Jurisdiction
Robinhood is already facing pushback from state regulators. On the same day it announced its product launch, the company filed lawsuits against gaming regulators in Nevada and New Jersey, alleging they were trying to block its new contracts.
“If states could regulate some but not all entities relevant to these transactions,”Robinhood argued, “such regulation would infringe on the CFTC’s exclusive jurisdiction and fracture what Congress intended to be a uniform set of regulations for commodity futures and swaps trading.”
Robinhood also tried entering the sports realm earlier this year when it launched Super Bowl prediction contracts. However, the CFTC intervened just a day later and requested the company stop offering them.
Despite legal uncertainty, companies see major potential in combining these markets. A 2025 Mizuho survey found that two-thirds of Robinhood users also use betting apps like FanDuel or DraftKings. Chad Beynon, head of U.S. research at Macquarie Capital, said, “a bigger [total addressable market] and the cross-sell would be massive,” for early movers.
Is the Market Ready?
Robinhood, for its part, sees event contracts as a logical extension of its platform. “Adding pro and college football to our prediction markets hub is a no-brainer for us as we aim to make Robinhood a one-stop shop,” the company said in its announcement.
Others argue the real question is whether consumers understand what they’re engaging in. Simkins warned, “What worries me is confusing the consumer and giving them the impression that ‘taking the Jets to win’ this weekend, even though I’m a fan, is a sound investment decision. This isn’t something that Warren Buffett would be preaching.”
Source:
“The gray area Robinhood and FanDuel are using to bring sports betting and stock trading closer together”, finance.yahoo.com, September 1, 2025
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