Robinhood, the popular U.S. trading platform, is preparing to expand its fast-growing prediction markets business into the United Kingdom and Europe. Following strong adoption in the United States, the company is now in early talks with the UK Financial Conduct Authority (FCA) to determine how these products could be structured overseas.
Growing Demand for Prediction Markets
Launched earlier this year, Robinhoodâs Prediction Markets Hub allows users to trade event-based contracts tied to real-world outcomes, including interest rate moves, elections, and sports results.
The platform has seen rapid adoption. According to CEO Vlad Tenev, more than 4 billion event contracts have already been traded, with over half of the volume occurring in the third quarter alone.
JB Mackenzie, Robinhoodâs Vice President and General Manager of Futures, said the UK and Europe represent some of the strongest markets for expansion, noting that regulators will play a key role in shaping the rollout.
The Regulatory Challenge
One of the biggest hurdles Robinhood faces abroad is regulatory classification.
- In the U.S., prediction markets are treated as futures products and fall under the oversight of the Commodity Futures Trading Commission (CFTC).
- In the UK and EU, similar contracts may be regulated as gambling products, which would place them under a very different legal framework.
âWeâve been asking the FCA how these markets would be treated â would they be swaps, futures, or gambling? Thatâs the key question,â Mackenzie told Bloomberg.
While Robinhoodâs offering looks similar to decentralized prediction markets, it is fully built on traditional financial infrastructure. Event contracts are executed through Kalshi, a CFTC-regulated derivatives exchange, and settled in U.S. dollars.
At the same time, Robinhood has been expanding its presence in digital assets, offering crypto trading and exploring tokenized stock offerings, showing a broader commitment to next-generation finance.
Competition From Decentralized Platforms
The rise of blockchain-based prediction markets has created new competition. Platforms like Polymarket, built on Polygon, have seen billions in trading volume. Activity peaked during the 2024 U.S. presidential election, when tradersâ forecasts closely mirrored real-world results.
Ethereum co-founder Vitalik Buterin has praised these platforms, highlighting how financial incentives can be used to align truth-seeking behavior, providing more accurate forecasting than traditional polling.
Robinhoodâs move into Europe could mark a turning point for prediction markets, bringing them into the mainstream financial system. However, the company will need to carefully navigate regulatory challenges to avoid being categorized as gambling rather than financial derivatives.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.