Robinhood Launches Prediction Market Hub for Global Events

Robinhood has expanded its trading offerings by launching a dedicated prediction market hub, allowing users to trade contracts based on the outcomes of key global events. This new feature, announced on March 17, includes initial offerings such as contracts tied to the Federal Reserve’s target interest rate for May and the men’s and women’s College Basketball Tournaments. Each contract represents an approximate probability between 1% and 99%, with each cent effectively representing a 1% probability that the event will occur. For instance, a contract priced at 53 cents indicates a 53% probability that the event will happen according to that market.

The service is available to eligible customers across the US through KalshiEX LLC, a regulated exchange overseen by the Commodity Futures Trading Commission (CFTC). Over time, Robinhood plans to introduce contracts covering various topics, including financial markets, politics, and sports. J.B. Mackenzie, Robinhood’s VP and GM of Futures and International, emphasized the company’s commitment to innovation and the importance of prediction markets in capturing insights across finance, news, and culture. The firm explained that building a standalone prediction markets hub allows it to better serve its customers looking to engage with events that align with their interests.

Prediction markets allow traders to place financial bets on future events, incentivizing accurate forecasting. While these markets faced regulatory hurdles in the US, interest has grown recently. During the 2024 US presidential election, event-based betting platforms saw increased participation and correctly predicted Donald Trump’s victory. Robinhood briefly entered this space during that period, offering election-related contracts. The company later tested a Super Bowl betting market but withdrew it due to compliance challenges. Robinhood asserts that its latest initiative follows all necessary regulatory guidelines this time. The company said it has engaged with the CFTC to ensure compliance, with Mackenzie stating, “We’re excited to offer our customers a new way to participate in prediction markets and look forward to doing so in compliance with existing regulations.”