Following the strong uptake of its US prediction markets, discount brokerage Robinhood is exploring ways to bring the offering overseas, with early plans to launch similar services in the United Kingdom and Europe.
The company introduced its Prediction Markets Hub earlier this year, a platform that lets users trade on the outcomes of real-world events, such as interest rate decisions or sports results. Now, Robinhood is in discussions with the UK Financial Conduct Authority (FCA) to determine how such products could be offered locally, Bloomberg reported Tuesday.
However, one of the main challenges lies in regulatory classification.
In the United States, prediction markets are treated as futures products, regulated by the Commodity Futures Trading Commission (CFTC). In other jurisdictions, similar products may fall under gambling laws, raising questions about oversight.
“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?” JB Mackenzie, vice president and general manager of futures at Robinhood Markets, told Bloomberg.
Mackenzie added that the UK and Europe are among the regions showing the strongest demand for prediction market products.
The interest in expanding overseas is understandable. Robinhood CEO Vlad Tenev recently said on X that the platform has already seen more than 4 billion event contracts traded, with over half of that volume occurring in the third quarter alone.
While Robinhood’s product mimics the structure of decentralized prediction markets, it is built entirely on traditional financial rails, not blockchain. Event contracts are executed through Kalshi, a CFTC-regulated derivatives exchange, and settled in US dollars.
Even so, Robinhood remains highly active in the crypto and blockchain sectors, offering digital asset trading and moving toward tokenized stock offerings.
Related: SEC weighs plan to allow blockchain-based stock trading amid crypto push: Report
Decentralized prediction markets gain ground
Prediction markets have surged in prominence over the past year, fueled by the growth of decentralized platforms. Built on public blockchains, these markets use smart contracts to automate trades and payouts, allowing users to speculate on outcomes ranging from elections to economic data and sports.
However, unlike traditional exchanges, decentralized platforms offer greater transparency and accessibility, though they also face challenges such as higher volatility, regulatory uncertainty and uneven liquidity.
The leading decentralized platform, Polymarket, built on Polygon, has reported billions of dollars in monthly trading volume, with activity peaking in November 2024 during the lead-up to the US presidential election.
Polymarket’s accuracy and liquidity during that cycle drew widespread attention, as traders’ forecasts often tracked closely with eventual outcomes.
Ethereum co-founder Vitalik Buterin described election cycles as just the beginning, noting 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,” he said.
Related: US government poised to shut down: Will it affect crypto market structure bill?
