Forget Cinderella stories, Robinhood is creating the March Madness controversy

I’m pretty sure everyone who reads this article will have filled out at least one bracket before the NCAA Tournament started last week. No matter where you live, this form of “gambling” has been accepted nationwide.

Robinhood taking March Madness futures

Shortly after the Arizona Wildcats beat the Oregon Ducks Sunday’s final game to seal the final ticket to the Sweet 16, Massachusetts state officials opened up an investigation on Robinhood Markets Inc.

Robinhood Markets Inc. is a trading company that provides a trading platform which deals with stocks, trade funds, index options and futures.

According to their website, “people can people can invest with no account minimums through Robinhood Financial LLC, a registered broker dealer (member SIPC), buy and sell crypto through Robinhood Crypto, LLC, spend and earn rewards through debit cards with Robinhood Money, LLC and credit cards with Robinhood Credit, Inc., trade US stocks without commission or FX fees in the UK through Robinhood U.K. Ltd., trade crypto in select jurisdictions in the European Union through Robinhood Europe.”

You may not have read anything about March Madness or basketball in their statement, but they have put “betting lines” on potential winners of the NCAA Tournament on their platform, which the Massachusetts Secretary of State Bill Gavin sees as a problem. “This is just another gimmick from a company that’s very good at gimmicks to lure investors away from sound investing,” Galvin told Reuters.

Robinhood proud to offer Big Dance products

While explaining the fine print of the investigation, Gavin stated that the trading company was “linking a gambling event on a popular sport event that’s especially popular to young people to a brokerage account.”

A subpoena was send to Robinhood in attempts to find information on how many of its users attempted or requested to trade contracts on the NCAA men’s and women’s basketball tournament.

The trading company responded to the investigation. “Prediction markets have become increasingly relevant for retail and institutional investors alike, and we’re proud to be one of the first platforms to offer these products to retail customers in a safe and regulated manner,” said a Robinhood spokesperson.

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