Following strong adoption in the US, Robinhood is exploring ways to expand its prediction market offerings to the United Kingdom and Europe. The company launched its Prediction Markets Hub earlier this year, allowing users to trade on outcomes of real-world events, such as interest rate decisions and sports results.
Robinhood is currently in discussions with the UK Financial Conduct Authority (FCA) to determine how these products could be offered locally, Bloomberg reported. One of the key challenges is regulatory classification, as similar products may fall under gambling laws outside the US, where they are treated as futures and regulated by the Commodity Futures Trading Commission (CFTC).
JB Mackenzie, vice president and general manager of futures at Robinhood Markets, explained: “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?” Mackenzie added that the UK and Europe show significant demand for prediction market products.
Trading volume and infrastructure
Robinhood CEO Vlad Tenev recently shared on X that the platform has facilitated over 4 billion event contracts, with more than half traded in the third quarter alone. While the product mirrors decentralized prediction markets in structure, it operates on traditional financial rails rather than blockchain, with contracts executed through Kalshi, a CFTC-regulated derivatives exchange, and settled in US dollars.
The company remains active in crypto and blockchain, offering digital asset trading and exploring tokenized stock offerings.
Decentralized prediction markets gaining attention
Decentralized prediction markets have grown in prominence over the past year. These platforms, built on public blockchains, use smart contracts to automate trades and payouts, enabling speculation on events from elections to economic data and sports. They offer greater transparency and accessibility but face challenges such as higher volatility, regulatory uncertainty, and liquidity issues.
Polymarket, a leading decentralized platform on Polygon, has reported billions of dollars in monthly trading volume, peaking in November 2024 during the US presidential election. Its forecasts closely aligned with eventual outcomes, drawing attention for its accuracy and liquidity. Ethereum co-founder Vitalik Buterin highlighted that the deeper innovation lies in using financial incentives to align truth-seeking behavior: The broader concept is that you can use finance as a way to align incentives in order to provide viewers with valuable information.