Robinhood CEO: We are at “the frontier of innovation” with election event contracts entry
Vladimir Tenev has outlined the thinking behind Robinhood’s decision to offer event contracts ahead of the US presidential election, as industry stakeholders suggest election betting is just the start for the trading platform
Robinhood CEO Vladimir Tenev has shed light on the trading platform’s entry into the US presidential election event contracts market after he claimed more than 10 million contracts were traded on the first full day of operations.
The company rolled out the contracts to a select number of customers via its Robinhood Derivatives product on October 28 to join the growing number of companies, such as Polymarket and Kalshi, in offering the market.
Robinhood’s product allows users to bet on just a singular outcome of whether former President Donald Trump or current vice president Kamala Harris will win the election.
Speaking as part of the company’s Q3 earnings analyst call on October 30, Tenev was pressed for further comment on how fruitful the contracts have been for Robinhood ahead of the election on November 5 and the work that went into creating the product.
“We just rolled out to 100% of customers after starting the rollout just this Monday, so huge kudos to the team for that. The path to offer this product was really paved less than 30 days ago and we moved quickly to make it available to customers ahead of the election,” the CEO explained.
Discussing what inspired the election event contracts, Tenev added that a core focus at Robinhood is to “win the active trader market”, before outlining how the firm plans to do that.
“Our approach is that if you’re an active trader, using Robinhood should put you in a position where you should really associate Robinhood with being at the forefront of technology, innovation, and trading,” he remarked.
“I think offering products like these, which you can’t really find at many of our competitors, is the best way to do that.
“The feedback is really, really good. You can see on social that it’s resonating with customers very, very clearly.”
Tenev added that Robinhood had already doubled the 10 million event contracts that were traded pre-full rollout.
The Robinhood CEO later doubled down on the reasons behind the firm’s election event contract strategy, claiming that it stems from a desire to be associated with “being at the frontier of innovation.”
Tenev concluded: “I think a nice secondary impact is it provides people with a reliable data source about where people predict the market will land.”
Robinhood’s website confirms that the election event contracts will be tradeable from October 28 through to November 1 within certain timeframes, before there will be “virtually 24-hour trading” on the market between November 3 and November 8.
Weighing in on the talking points presented by Robinhood’s decision to offer these contracts, Chris Grove, industry investor and Eilers & Krejcik Gaming partner emeritus, took to LinkedIn to assess the level of influence the trading platform currently possesses, given its more expansive reach than most US-based operators.
As pointed out by Grove, Robinhood boasts 24.2 million customers with funded accounts and 11.8 million active monthly users.
He went on to claim that there is little incentive for the company to stop at election betting event contracts, especially given increasing financial pressure amid a slump in share price.
The business’ shares are down more than 14% over the last five days to $23.49 following its Q3 release in which revenue leapt 36% year on year to $637m.
“Robinhood will absolutely not stop at election betting. Why would it? The company is under financial pressure and needs to unlock high-margin growth opportunities. Election betting alone is not enough to deliver needle-moving performance,” Grove wrote.
“The borders of the other betting markets Robinhood could offer are ambiguous and subject to revision. It’s not evident that Robinhood will be subject to state-based gambling regulation or taxation. Still, the company is well-equipped to engage with such regulatory structures if necessary.
“The brand is strong, the user base is large and predisposed to betting, the user wallets are overflowing, the corporate core competencies are cross-applicable, and the financial incentives are aligned. A new warrior has entered the ring.”