Robinhood pushes for global regulation for prediction markets in expansion plans
Robinhood is exploring an expansion into global prediction markets, moving beyond the USA. The platform recently found itself as one of the leaders in sports predictions, looking for ways to tap into the growth of an already hot industry.
Robinhood may consider expansion of its prediction markets outside the USA. According to Bloomberg reports, Robinhood noticed the rapid expansion and potential of prediction markets, aiming to tap demand in other regions.
Prediction markets are still a controversial industry facing multiple waves of regulation. Robinhood rose to visibility following the success of crypto-native Polymarket, which was banned in some markets. Additionally, Robinhood was the venue for sports predictions, while Polymarket emerged as a news and current events platform.
Robinhood’s approach started with regulators, targeting the UK Financial Conduct Authority. The country is one of the locations excluded by Polymarket due to unclear regulations. The biggest problem is the issue of considering prediction markets as futures trading or as a subset of gambling.
Robinhood explores local regulations for prediction markets
The US market has been a major success for Robinhood, especially for its sports predictions. The platform logged over 2B contracts traded for Q3.
Robinhood is exploring countries with similar regulations, aiming to offer its products as a trade and not a gamble. Robinhood already has experience offering equities and crypto trading for the UK and EU markets since 2023.
Predictions have been organized as trading platforms for crypto-native Polymarket, and the lines are also blurred for Robinhood. The app also uses Kalshi and ForecastEx, which have obtained certification from the US Commodity Futures Trading Commission (CFTC).
Despite the regulation, prediction markets continue to face controversies, especially in gray area issues linked to current events.
Outcome decisions also depend on complex oracles, which sometimes fall prey to manipulated crypto-based votes.
Robinhood solves this issue with a curated market selection, avoiding the ones that are the most controversial or prone to manipulation. At the same time, platforms like Polymarket thrive on viral or controversial pairs, with an impact on social media.
Is a Polymarket token sale in the works?
The growth and success of prediction markets raised the issue of a potential token launch for Polymarket. Previously, there were rumors of a potential airdrop, but so far, there has been no official confirmation.
The expectations for Polymarket are to either choose an airdrop or go for a direct token sale. The Legion token sale platform has launched OTC markets, adding Polymarket as a presale token.
Based on the current hype for the platform, Polymarket is valued at $9B. A token launch is expected soon, potentially achieving an even higher valuation.
Polymarket is also picking up activity, with over 491K daily active traders as of September 29, a new three-month peak. Open interest is now over $171M, up 70% for the past months, as new traders move in for the viral prediction pairs.
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