Robinhood’s stock rose 8% on the Nasdaq after it announced a new betting markets hub in partnership with Kalshi, a CFTC-regulated prediction market platform. The new feature allows users to trade contracts on various events, including the Federal Reserve’s target interest rate in May and the results of the men’s and women’s College Basketball Tournaments.

Robinhood has been expanding beyond stock trading into cryptocurrencies and derivatives. On March 13, the company listed meme coins like Pengu (PENGU), Pnut (PNUT), and Popcat (POPCAT), following its January launch of futures contracts tied to Bitcoin. Its latest earnings report showed a 700% increase in crypto revenue in the fourth quarter of 2024, fueled by Trump’s election victory and rising market activity.

Kalshi, Robinhood’s partner for event contracts, is already registered to list a wide range of prediction markets, including political outcomes, economic indicators, and entertainment events. “We believe in the power of prediction markets and think they play an important role at the intersection of news, economics, politics, sports, and culture,” said JB Mackenzie, Robinhood’s vice president and general manager of futures and international.

Political betting markets have gained attention for their accuracy in capturing public sentiment. Platforms like Kalshi and Polymarket correctly predicted Donald Trump’s November election win, even as major polls suggested a tight race. Robinhood first experimented with political event contracts in October, allowing select users to bet on the presidential race between Trump and former Vice President Kamala Harris.

Since September 2024, prediction markets have grown in popularity after Kalshi won a legal case challenging a decision by the Commodity Futures Trading Commission (CFTC) that sought to prevent political event contracts. By November, trading volumes for election-related contracts across major platforms reached nearly $4 billion. However, in February, Robinhood suspended Super Bowl betting after receiving a request from the CFTC to restrict access to event contracts.

Robinhood’s expansion into new asset classes reflects a broader strategy to diversify its offerings. The company, known for commission-free stock trading, has increasingly focused on derivatives and alternative financial products.