Trading App Robinhood is the Latest Platform to Allow Traders to Also Bet on the Election

You may have heard their new ads on Sirius XM satellite radio Tuesday.

Robinhood Markets, Inc., the American financial services company providing electronic trading of stocks, exchange-traded funds and cryptocurrency, as well as cryptocurrency wallets, credit cards and other banking services, is now allowing traders to also bet on the elections, much like our friends at BetOnline.

Not sure if it is the fallout from the Madison Square Garden rally, but former US president and GOP nominee Donald Trump has seen his odds drop from -300 to -200 at BetOnline over the last 48 hours.

As for Robin Hood, the elections trading began on Monday (October 29) and presumably will extend far beyond next Tuesday's elections once the midterms get underway. 

The Robin Hood platform may at first appear a little more complicated than simply placing bets via BetOnline.

Robin Hood offers what is known as events contracts, an agreement on the likelihood that an event will have a certain outcome, such as a Harris or Trump win come Tuesday (or more likely days after Election Day).

You put a monetary value on an outcome before it happens, the value of either outcome fluctuates based on the market sentiment and you get money from a contract if it pans out, if it doesn't it's worth zero dollars. It's like investing in the victory of one side or another. 

In other words, you are betting on the election.

"We believe event contracts give people a tool to engage in real-time decision-making," Robin Hood said in a statement.

Earlier this month a U.S. Court of Appeals decision paved the way for election betting. It dissolved an order that prevented a startup from taking bets on which political party would end up controlling the House and Senate after the election.

Critics claim the allowance of this type of wagering creates incentives for election interference and could open the door to problems as we get closer to Nov. 5.

Sen. Jeff Merkley is one such critic who spoke to Scripps News Service.

"Do you want to be able to have people bet on the outcome of election and spend vast sums smearing the candidate they want to lose, corrupting the election from the vision of guiding our country forward into a simple gaming exercise about enriching those who can not only just huge bets but can influence the outcome of those bets? Absolutely not, that's why the law was written in this fashion," said Merkley.