Robinhood has launched a prediction market allowing users to bet on the NCAA March Madness basketball tournament, following a partnership with event market operator Kalshi. This initiative marks a significant step as event derivatives increase in popularity in the U.S., despite regulatory challenges. Starting March 20, users can place wagers during the tournament. Kalshi previously gained approval to operate event contracts during the last U.S. presidential election, signaling a growing demand for prediction markets. However, operators face scrutiny from regulators, impacting their efforts to expand offerings. Robinhood's previous attempt to offer a prediction market for the Super Bowl was shut down hours after its launch due to pushback from the CFTC. With the addition of prediction markets, Robinhood aims to attract new users as it navigates the current regulatory landscape. The trading platform's shares experienced slight gains, reflecting positive market sentiment toward this launch.

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