Robinhood is entering the prediction market and letting users bet on the outcome of the presidential election, the company announced on Monday.
That means starting Monday users can begin to trade contracts for either Vice President Kamala Harris or former President Donald Trump to win the election in November. Users will have to meet certain criteria in order to be eligible to make these trades, such as being a U.S. citizen and having already been approved for a Robinhood Derivatives account.
The election prediction market will be offered through Robinhood Derivatives. Betting on the election is a type of financial speculation known as an event contract in which an investor earns a return if a future event occurs. In this case, whether Trump or Harris will become president.
Betting on the presidential election is the inaugural event contract offered at Robinhood, according to the company’s website. As of now, it is the only bet available on Robinhood’s prediction markets.
Robinhood’s decision to begin offering election futures comes shortly after another prediction markets platform, Kalshi, won a ruling against the Commodity Futures Trading Commission that had been trying to block it from offering election outcome trading. The CFTC plans to appeal the ruling. However, the schedule for the hearing means the issue won’t be decided before Election Day on Nov. 5.
Investors in prediction markets can buy either a Yes or No contract for each of the candidates. The price varies based on the market’s belief of each candidate’s likelihood to win the election. Robinhood users are not allowed to own Yes contracts for both candidates, according to the company’s website.
A spokesperson for Robinhood told Fortune the decision was meant to expand the platform’s products for its customers. “Event contracts give people a tool to engage in real-time decision-making, unlocking a new asset class that democratizes access to events as they unfold,” the spokesperson said via email. “By providing election contracts on Robinhood, customers will now have the ability to participate in contract markets that were previously unavailable to US citizens.”
Some of the biggest prediction markets platforms are PredictIt and Polymarket, which have both gained significant attention throughout the election season. That’s in part because in recent weeks prediction markets have tilted heavily in favor of Trump, while voter polls still show a race that is dead even.
On PredictIt, the price of a Yes contract for Trump and Harris is 61 cents and 42 cents, respectively. Those prices reflect the amount of money a person would need to bet in order to receive a $1 payout. Users can also sell any contracts they own on the open market if they wish. Doing so can also offer a return if the current price of the contract is higher than the price at which someone purchased it. In that case, their profits would be the difference between the two prices.
Polymarket, which bills itself as the world’s largest prediction market, has Trump as even more of a favorite. Its odds have a Trump win priced at 66 cents and Harris at 34 cents. In the home stretch of the campaign, Polymarket saw several major bettors, colloquially known as whales, place massive bets on a Trump win. A single individual from France believed to control four separate Polymarket accounts bet around $45 million on Trump. Polymarket has different guidelines than Robinhood. Polymarket does not allow investors betting on the U.S. election to be in the U.S. and users must place their bets in cryptocurrency.
One rule that Robinhood investors might want to note is that if they bet on the right outcome, their payday won’t happen until the election is officially certified by Congress. Payouts will be issued on Jan. 8, two days after the election is certified on Jan. 6.
