Massachusetts’ securities regulator has launched an investigation into Robinhood’s prediction markets offering, which allows users to bet on the outcomes of various events, including basketball tournaments. This move comes amid concerns that the trading platform is targeting young people with its gambling-like features.

According to a report by Reuters, Massachusetts Secretary of State Bill Galvin has subpoenaed Robinhood for information on its marketing materials and the number of Massachusetts-based users who have traded sports event contracts on college basketball tournaments. Galvin expressed concern over the platform’s use of a popular sports event to lure investors away from sound investing practices.

Robinhood launched its prediction markets hub on March 17, offering event contracts on college basketball tournaments and the May federal funds rate. These contracts are regulated by the Commodity Futures Trading Commission (CFTC) and offered through CFTC-registered entities, according to a spokesperson for Robinhood.

The platform’s share price remained relatively flat after the news of the investigation broke, following a 9% jump earlier in the day. The CFTC and Galvin’s office have not yet commented on the matter.

Event contracts, also known as prediction markets, allow users to bet on the outcome of various events, from sports games to election results and even cryptocurrency prices. They have gained popularity through platforms like Polymarket and Kalshi, but have also faced scrutiny from regulators.

Last month, Robinhood discontinued its event contracts for the Super Bowl after the CFTC requested it to do so. The recent probe by Massachusetts also includes a request for internal communications about the decision to launch the college basketball event contracts, following the CFTC’s request to stop the Super Bowl contracts.

The CFTC has also reportedly asked Kalshi and Crypto.com to explain how their Super Bowl event contracts comply with derivatives regulations. This move highlights the increasing relevance of prediction markets for both retail and institutional investors.

In the world of cryptocurrency, Solana has been making headlines as a potential “100x better” alternative to meme coins, despite a recent plunge in revenue. To stay updated on the latest developments in the crypto world, subscribe to our Law Decoded magazine.