Massachusetts Secretary Bill Galvin has initiated an investigation into Robinhood regarding its prediction markets that allow users to bet on sports events, including college basketball tournaments. The investigation was prompted by concerns that the platform is connecting gambling events popular among young people to brokerage accounts, which Galvin described as a gimmick to attract investors away from responsible investing. Robinhood recently launched event contracts on its platform, regulated by the Commodity Futures Trading Commission (CFTC). A spokesperson stated that the company is one of the first platforms to offer these products in a regulated manner. However, regulatory scrutiny is increasing, as demonstrated by the CFTC's requests to Kalshi and Crypto.com to ensure compliance with derivatives regulations. Massachusetts has also asked Robinhood for internal communications related to the rollout of these contracts after the CFTC halted its Super Bowl-related offerings. Despite the probe, Robinhood's share price remained relatively stable.

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