The popular Robinhood brokerage will let its users bet on the outcome of the 2024 presidential election just about a week out from Election Day.
Robinhood, which boasts more than 20 million users, said in a Monday news release that it has launched election contracts. Event contracts allow people to bet on either Vice President Kamala Harris or former President Donald Trump — and to get a payout based on who is certified by Congress in January.
Users must fit certain criteria in order to participate in the new market, including being a U.S. citizen.
WHO IS WINNING THE ELECTION? EXPERT REVEALS WHY BETTING ODDS ARE SO TELLING
Political betting markets have surged in popularity during this election cycle. Polymarket and PredictIt have been two of the heaviest hitters, but Robinhood moving into the space could be a big deal, given the number of people who use the brokerage platform.
Each share is priced based on bets for and against it on a scale from $0.00 to $1. Those share prices also imply probability. So if a Harris share is valued at 34 cents (which is the present rate on Polymarket), it implies she has a 34% chance of being the Democratic nominee.
Users can swing the odds in markets with low trading volume by buying large numbers of Trump or Harris shares, changing the implied odds.
Koleman Strumpf, a professor at Wake Forest University who is an expert in political betting markets and has studied them for decades, told the Washington Examiner over the summer that betting markets contain valuable information because people on the platform have skin in the game (i.e., money) and tend to do research.
“It’s not a crystal ball, like the stock market isn’t a crystal ball, but it wraps up the opinion of a lot of people who generally are pretty smart with the idea that, why are they smart? Because they are putting money on the line,” Strumpf said.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
The markets have swung heavily toward Trump in recent weeks.
On PredictIt, shares of Trump were going for 61 cents on Monday morning. On Polymarket, where there is $2.2 billion in volume, bettors are assessing a 66% chance of a Trump victory in November.