Robinhood Markets (HOOD) aims to score a touchdown with its first foray into sports betting.
The online trading platform ended months of speculation on Monday by saying it would launch event contracts for Super Bowl LIX, allowing customers to place trades on who will win the big game: the Kansas City Chiefs or the Philadelphia Eagles.
The event contracts are eligible starting Monday.
While not sports betting in the technical sense, the announcement will likely have the folks over at DraftKings (DKNG) and FanDuel looking over their shoulder.
This comes on the heels of Robinhood debuting event contracts in October for the presidential election. Customers of the platform were able to trade on "who will win the 2024 presidential election."
Robinhood said on Nov. 5 — election day — that a total of 400 million of the contracts were traded on its platform.
"We're going to broaden that [events business out]," Robinhood co-founder and CEO Vlad Tenev told me in a December interview. "There's all kinds of contracts and events that are permissible that we'd want to allow people to trade."
Event contracts are only part of Tenev's efforts to diversify Robinhood beyond just stock trading.
In January, the platform provider debuted futures and index options trading.
The company has since released Robinhood Legend, billed as a sleeker platform that targets more-sophisticated traders.
Robinhood Legend allows up to eight charts open in a single window, and it could elevate various technical indicators such as Bollinger Bands.
Meanwhile, June 2024 brought Robinhood's acquisition of crypto exchange Bitstamp, while it scooped up AI-powered investment research firm Pluto in July. It also took aim at credit players American Express (AXP) and Visa (V) in March with the launch of a credit card that offers 3% cashback.
Tevev tells me his goal is to make Robinhood a one-stop shop for building generational wealth.
Watch: how TD Ameritrade's former CEO sees AI impacting trading
Robinhood's business could grow by 10 times over the next 10 years by widening its product reach, the company laid out at a December investor day. It estimates the aforementioned futures trading will become a nine-figure business over time.
"Ultimately, we think Robinhood has made notable progress in legitimizing its operations vs. its primary reliance on meme-stock trading three years prior. In particular, new product development including its credit card, solicitation of active traders, the buildout of its cryptocurrency platform, and the buildout of the derivative trading (including the potential for event-driven products/betting products) over time," JP Morgan analyst Ken Worthington said in a recent client note.
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