TL;DR
- Robinhood is considering expanding its prediction markets, aiming to operate in regions where they are treated as trading rather than gambling.
- The platform combines experience in sports betting with clear regulatory compliance, avoiding controversial markets and ensuring adherence through Kalshi and ForecastEx.
- Polymarket generates high volume with viral pairs, reporting 491,000 daily active traders and $171M in open interest.
Robinhood is evaluating expanding its prediction markets beyond the United States, focusing on regions where these markets are considered a form of trading rather than gambling.
The platform, which has strengthened its position in U.S. sports betting with over $2 billion in contracts traded in Q3, seeks to tap into the growth of a sector that combines cryptocurrencies, event information, and financial markets.
Expansion requires coordination with local regulators, such as the U.K. Financial Conduct Authority (FCA), to ensure products are classified as trading instruments rather than gambling. Robinhood is targeting countries with regulations similar to the U.S., where it has offered equities and crypto trading since 2023.
Prediction markets face a complex regulatory framework and ongoing controversies over whether they should be classified as futures or gambling. Robinhood mitigates these risks by curating its markets, avoiding the most controversial or manipulation-prone pairs.
How Robinhood Differs From Polymarket
In contrast, Polymarket operates with viral and controversial pairs, generating significant social media impact. Both platforms rely on complex oracles to determine outcomes, which can occasionally be manipulated. Robinhood’s reputation has been strengthened by its use of Kalshi and ForecastEx, both certified by the CFTC, ensuring regulatory compliance in the United States.
The success of prediction markets has also fueled expectations for a potential Polymarket token launch. Options under consideration include an airdrop or a direct token sale, with the Legion platform already listing Polymarket as a presale token in OTC markets.
Polymarket reports over 491,000 daily active traders, with open interest exceeding $171M, a 70% increase in recent months. The platform is currently valued at $9B.
Robinhood’s development reflects the consolidation of prediction markets as a fast-growing niche, combining trading, cryptocurrencies, and viral events. The firm’s international expansion will depend on its ability to operate within clear regulatory frameworks and offer secure, compliant products
