"The suit claims Robinhood 'facilitates the sale of illegal and unregulated sports event gaming contracts to its customers through its mobile app and website' and misleads users about the nature of these contracts."
"According to the complaint, Robinhood began selling event contracts on October 28, 2024, and expanded into sports on March 17, 2025, maintaining the illusion of legitimate trading."
"The filing includes Robinhood's own explanation of event contracts, stating they are 'a type of financial derivative that allows traders to speculate on a specific event.'"
A proposed class action lawsuit has been filed against Robinhood Markets Inc. and Robinhood Derivatives LLC, accusing them of running an illegal sports gambling operation. Five plaintiffs from various states claim they lost money trading sports event contracts on the platform. The lawsuit alleges that Robinhood misled users into believing these contracts were legitimate investments, while they are actually traditional wagers on sports outcomes. The complaint details the timeline of Robinhood's entry into sports event contracts and includes quotes from the company's own descriptions of the product.
Read at ReadWrite
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