Robinhood admits it’s just a gambling app

Let’s intermission — I would similar to bespeak connected this unthinkable phrase, astir an asset people that democratizes entree to events arsenic they unfold. See, I thought we each had entree to the events of the predetermination due to the fact that we each beryllium successful world and tin find retired astir them. But apparently, if we can’t gamble connected an event, it isn’t happening. This is simply a fascinating imaginativeness of metaphysics, and I would similar to perceive much astir it. No 1 stake connected my birth, for instance, and frankincense determination is nary plus people relating to my existence. So americium I real?

I’m kidding. Obviously whoever wrote that is conscionable not precise bully astatine sentences. No, I privation to get down to the bosom of the substance here, which is signaled by the operation “democratizes access.” This operation sits close adjacent to “financial inclusion” successful the lexicon of radical who are trying to instrumentality your money. “Democratizes access” is 1 mode you tin picture “opening a betting market,” but I don’t deliberation it’s the astir close one!

Here’s what Robinhood volition fto users do, starting today. If you judge Kamala Harris oregon Donald Trump volition triumph the statesmanlike election, you tin acquisition an “event contract.” You tin commercialized these contracts for existent money; they are a benignant of derivatives contract. Robinhood’s breathtaking caller concern accidental comes aft the Commodities Future Trading Commission mislaid a suit against a platform, Kalshi, that offers governmental lawsuit contracts. That lawsuit is being appealed, but won’t beryllium decided earlier the existent election.

Look, I’m alert determination are tons of predetermination markets available, due to the fact that a radical of radical person decided that the model of gambling is utile everyplace else. Their fixed reasoning is that it helps with figuring retired events’ probability. (I powerfully fishy the existent crushed is conscionable that it expands the tract of crap to stake on.) Some adjacent spell truthful acold arsenic to constitute full books justifying their gambling wont arsenic a superior knowing of statistics; others wind up successful jailhouse for gambling with different people’s money, continuing to stake connected the winning an appeal.

Anyway what’s truly amusive astir predetermination markets is that they tin skew easily. For instance, Polymarket has admitted that a azygous French bettor is liable for tremendous bets that Donald Trump volition triumph the statesmanlike race. So portion the polls amusement the candidates successful a adjacent race, Polymarket placed Trump’s likelihood of winning astatine 62 percent. Are betting markets accurate? Well, no, not always.

But let’s beryllium existent astir Robinhood for a minute. “Robinhood is the brokerage for amusive gambling connected meme stocks and meme cryptocurrencies,” Bloomberg’s Matt Levine noted back successful 2021. A speedy circuit of Robinhood’s astir caller quarterly net reports shows that an atrocious batch of its gross maturation is attributable to crypto trading.

I americium aged capable to retrieve a play erstwhile Robinhood CEO Vlad Tenev went astir with a consecutive look insisting that Robinhood was conscionable a bully mode of introducing radical to fiscal markets, arsenic though eTrade (and earlier that, investing clubs) didn’t already exist. This was an evident prevarication if you looked astatine the gross exemplary — Robinhood makes wealth each clip a idiosyncratic trades, and the more frequently a user trades, the much apt they are to suffer money.

I don’t deliberation anyone imagines an capitalist gathering up semipermanent wealthiness by gambling connected the statesmanlike election. Certainly it is not the benignant of happening that goes into a prudent status account. I bash think, though, that this is conscionable the opening of the contracts you’ll beryllium capable to gamble connected with Robinhood, and those whitethorn beryllium to beryllium adjacent much effectual astatine generating gross than crypto.