Robinhood admits it’s just a gambling app

Oct 29, 2024 02:40 AM - 2 weeks ago 17879

US citizens tin gamble connected the upcoming election connected Robinhood, the financial nihilism app announced. Robinhood has termed this “unlocking a caller plus people that democratizes entree to events arsenic they unfold.”

Let’s region — I would for illustration 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 because we each beryllium successful reality and tin find retired astir them. But apparently, if we can’t bet connected an event, it isn’t happening. This is simply a fascinating imagination of metaphysics, and I would for illustration to perceive much astir it. No 1 stake connected my birth, for instance, and frankincense location is nary plus people relating to my existence. So americium I real?

“Democratizes access” is 1 measurement you tin picture “opening a betting market”

I’m kidding. Obviously whoever wrote that is conscionable not very bully astatine sentences. No, I want to get down to the bosom of the matter here, which is signaled by the building “democratizes access.” This building sits correct adjacent to “financial inclusion” successful the lexicon of group who are trying to return your money. “Democratizes access” is 1 measurement you tin picture “opening a betting market,” but I don’t deliberation it’s the astir meticulous one!

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

Look, I’m alert location are tons of predetermination markets available, because a group of group person decided that the model of gambling is useful everyplace else. Their fixed reasoning is that it helps pinch figuring retired events’ probability. (I powerfully fishy the existent logic is conscionable that it expands the section of crap to stake on.) Some moreover 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 pinch different people’s money, continuing to stake connected the winning an appeal.

Anyway what’s really nosy astir predetermination markets is that they tin skew easily. For instance, Polymarket has admitted that a azygous French bettor is responsible for tremendous bets that Donald Trump will triumph the statesmanlike race. So while the polls show 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 nosy 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 pinch a consecutive look insisting that Robinhood was conscionable a bully measurement of introducing group to financial markets, arsenic though eTrade (and earlier that, investing clubs) didn’t already exist. This was an evident dishonesty if you looked astatine the gross exemplary — Robinhood makes money each clip a personification trades, and the more frequently a user trades, the much apt they are to suffer money.

I don’t deliberation anyone imagines an investor building up semipermanent wealthiness by gambling connected the statesmanlike election. Certainly it is not the benignant of point that goes into a prudent status account. I do think, though, that this is conscionable the opening of the contracts you’ll beryllium capable to bet connected pinch Robinhood, and those whitethorn beryllium to beryllium moreover much effective astatine generating gross than crypto.

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