As the men’s March Madness tournament heads into its second week of action, Massachusetts state officials are investigating a prominent trading platform’s prediction markets hub.
Massachusetts Secretary of State Bill Galvin said in an interview with Reuters on Monday that he was concerned that Robinhood was “linking a gambling event on a popular sports event that’s especially popular to young people to a brokerage account.”
“This is just another gimmick from a company that’s very good at gimmicks to lure investors away from sound investing,” Galvin told Reuters.
The secretary of state’s office confirmed to Boston 25 News that the office sent Robinhood a subpoena last week.
A spokesperson for Galvin’s office tells Boston 25 News that the subpoena seeks copies of Robinhood’s marketing materials and asks the company to provide the names of users with brokerage accounts who requested to trade college sports events contracts, the official said.
“Prediction markets have become increasingly relevant for retail and institutional investors alike, and we’re proud to be one of the first platforms to offer these products to retail customers in a safe and regulated manner,” a Robinhood spokesperson told Reuters.
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