Following a strong uptake in the United States, discount brokerage Robinhood is exploring the expansion of its prediction markets to international regions, with early plans focused on the United Kingdom and Europe. The company introduced its Prediction Markets Hub earlier this year, enabling users to trade on the outcomes of real-world events such as interest rate decisions or sports results. According to Bloomberg, Robinhood has already seen over 4 billion event contracts traded, with more than half of that volume occurring in the third quarter alone, as highlighted by CEO Vlad Tenev on X.
Robinhood is now in discussions with the UK Financial Conduct Authority (FCA) to determine how these products could be offered locally. However, regulatory classification poses a challenge; in the US, prediction markets are treated as futures products regulated by the Commodity Futures Trading Commission (CFTC), while in other jurisdictions, they may fall under gambling laws. "So the question would be where is swap oversight, let's say in the UK? That's a question that we've been asking the FCA, how do we work it?" said JB Mackenzie, vice president and general manager of futures at Robinhood Markets. Mackenzie added that the UK and Europe are among the regions showing the strongest demand for prediction market products.
Although Robinhood's product is built on traditional financial rails and executed through CFTC-regulated Kalshi, settling in US dollars, the news underscores the broader rise of decentralized prediction markets. Platforms like Polymarket, built on the Polygon blockchain, have reported billions of dollars in monthly trading volume, with activity peaking during the November 2024 US presidential election. Ethereum co-founder Vitalik Buterin emphasized the potential of such markets, noting that they use financial incentives to align truth-seeking behavior. Polymarket's accuracy and liquidity during the election cycle drew widespread attention, and the platform was recently reported to be weighing a potential deal valuing it at $9 billion, up from $1 billion just months ago.
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