Robinhood and FanDuel Bring Sports Betting and Stock Trading Closer Together with Event Contracts.

Robinhood and FanDuel have introduced event contracts, a product that combines sports betting and stock trading. This product operates in a gray area between wagers and investments and is regulated by the Commodities Futures Trading Commission. The American Gaming Association and major sports leagues have expressed concerns about the potential integrity risks and legal fights are emerging. Experts predict that the product will evolve rapidly, but its legal and regulatory landscape is unclear.

Robinhood and FanDuel have introduced event contracts, a novel product that combines sports betting and stock trading. This product operates in a regulatory gray area, as it is neither a wager nor an investment, and is regulated by the Commodities Futures Trading Commission (CFTC) [1].

Event contracts offer users a binary yes-or-no choice on a defined event, such as predicting the winner of a football game or the price of gold. For instance, users can bet on whether the Philadelphia Eagles will win against the Dallas Cowboys on September 4, or whether the price of gold will close above or below $3,500 an ounce the next day [1].

The appeal of event contracts is clear, as they allow users to engage in both sports betting and stock trading under one platform. According to a 2025 survey from investment bank Mizuho, two-thirds of Robinhood users also use mobile sports betting platforms like FanDuel and DraftKings (DKNG) [1].

However, the introduction of event contracts has sparked concerns and legal fights. The American Gaming Association (AGA) considers event contracts on sports to be a form of gambling and argues that they should be regulated as such [1]. Major sports leagues, such as the NBA, have also expressed concerns about the potential integrity risks posed by sports prediction markets [1].

The legal landscape for event contracts is currently unclear, with companies like Robinhood and FanDuel arguing that the CFTC's exclusive jurisdiction trumps state gambling regulators' attempts to block their services [1]. Nevada, for example, is currently embroiled in a lawsuit with prediction market juggernaut Kalshi and partner Robinhood over this issue [2].

As the market for event contracts matures, two key questions loom: how consumers are protected, and how integrity in the market is enforced. Experts predict that the product will evolve rapidly, but the lack of clear guidance from the CFTC on the products remains a concern [1].

References:
[1] https://finance.yahoo.com/news/the-gray-area-robinhood-and-fanduel-are-using-to-bring-sports-betting-and-stock-trading-closer-together-162615447.html
[2] https://complianceandmore.substack.com/p/unnerved