Robinhood Markets faces a proposed class-action lawsuit in San Francisco federal court. The filing alleges the company's prediction markets function as an unlicensed sportsbook to circumvent gambling regulations. Plaintiffs claim the platform disguises sports betting as financial contracts on event outcomes.
Robinhood labeled the allegations meritless and plans to contest the suit. The company maintains its prediction markets are legitimate, federally regulated financial derivatives.
The litigation precedes Robinhood’s Q1 earnings report scheduled for April 28. The company also recently received in-principle approval to launch brokerage services in Singapore.