Massachusetts Secretary of State Bill Galvin expressed concerns over Robinhood linking gambling events on popular sports to brokerage accounts, particularly appealing to young people. Galvin’s office issued a subpoena to Robinhood seeking information on how many of its users in the state requested to trade college sports event contracts during the NCAA basketball tournaments. Event contracts allow traders to bet on specific outcomes, sparking debates between traders and critics who liken it to gambling.
Robinhood stated that its offered event contracts are regulated by the U.S. Commodity Futures Trading Commission (CFTC) and provided through CFTC-registered entities. Despite this, Massachusetts regulators are investigating internal communications regarding the decision to roll out college sports event contracts despite the CFTC’s prior request. This marks another legal confrontation between Galvin and Robinhood, following accusations in 2020 of encouraging risky trades using gamification strategies.
— news from Reuters