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Robinhood (HOOD+1.59%), the financial services company, is rolling back plans to allow its customers to invest in event contracts tied to the outcome of this weekend’s Super Bowl.
According to the company, the Commodity Futures Trading Commission (CFTC) has formally requested Robinhood to “not permit customers to access” sports event contracts.
Robinhood said its going to work with the CFTC to understand its concerns.
“We are disappointed by this outcome, especially given that we had been in regular communication with the CFTC about our intent and plans to offer this product,” the company said in a statement. “We’ve also taken steps to advocate for balanced regulation in the futures and derivatives markets, including participating directly in a CFTC roundtable, providing written feedback to the CFTC, and generally championing the economic benefits of event contracts.”
The news come just a day after Robinhood launched its “Pro Football Championship Market,” which essentially allowed its customers to bet on whether they think the Kansas City Chiefs or the Philadelphia Eagles will win the Super Bowl on Sunday by buying event contracts.
Robinhood allowed its users to buy one of two contracts based on their prediction for who would win the game. “Event contracts then pay out if the position held matches the correct outcome of the event; otherwise, they expire worthless,” according to the company’s help center.
Robinhood said the product was rolled out to about 1% of its customers. For users who already bought contracts, Robinhood will give them option to “close their positions or take them to resolution.”
Robinhood previously allowed users to trade event contracts based on the outcome of the U.S. presidential election.