Robinhood Steps Into Prediction Markets, Offering Contracts on Fed Rate, Sports

Trading platform Robinhood is launching a dedicated prediction markets hub within its app, allowing its users to trade on the anticipated outcomes of major global events. The move, announced on Tuesday, taps into a burgeoning market that has seen significant growth, particularly in the lead-up to events like the US elections, where platforms like Polymarket have witnessed explosive popularity.

At launch, Robinhood’s prediction markets hub will offer contracts on the upper bound of the target federal funds rate in May, as well as the outcomes of the upcoming men’s and women’s College Basketball Tournaments, Robinhood said in a statement on Monday. This initial offering provides a glimpse into the diverse range of events Robinhood intends to cover in the future.

“We believe in the power of prediction markets and think they play an important role at the intersection of news, economics, politics, sports, and culture,” said JB Mackenzie, VP & GM of Futures and International at Robinhood. “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.”

Robinhood emphasized that building a standalone prediction markets hub will allow them to better cater to customer interests in engaging with specific events. Prediction markets operate within a regulated framework, leveraging the structure of financial markets to enhance liquidity, transparency, and price discovery, ultimately aiming to provide a more efficient and reliable reflection of public sentiment on future outcomes.

The company reiterated its commitment to democratizing finance, aiming to provide retail investors with access to financial tools traditionally available to institutions. This foray into prediction markets aligns with this mission, offering a novel way for individuals to participate in and potentially profit from their knowledge of global events. Robinhood has also recently published a policy paper outlining its position and support for this emerging asset class.

The prediction markets hub will initially be accessible across the US through a partnership with KalshiEX LLC, a Commodity Futures Trading Commission (CFTC) regulated exchange. Robinhood has been in close communication with the CFTC and intends to continue working with the regulatory body to foster innovation within the futures, derivatives, and crypto markets. The initial contracts are beginning to roll out today and will be available to all eligible customers in the coming days, Robinhood said.

Robinhood’s entry into prediction markets comes at a time of significant growth for the industry. According to a report by Metatech Insights, the distributed prediction industry accounted for $1.4 billion in 2024, and is projected to reach $95.5 billion by 2035, reflecting a compound annual growth rate (CAGR) of 46.8% between 2025 and 2035.

One platform that has significantly contributed to the rising popularity of prediction markets is Polymarket . Notably, Polymarket experienced massive expansion in the run-up to the 2024 US presidential election, with wager volumes surpassing $2.5 billion. This is a dramatic increase compared to the approximately $10 million wagered on the platform during the 2020 elections, highlighting the growing interest in using prediction markets as a tool for gauging public opinion and potentially profiting from accurate forecasts.

However, Polymarket has faced scrutiny from regulators worldwide – Earlier this year, Singapore's Gambling Regulatory Authority (GRA) ordered local internet service providers to block access to the platform , following similar enforcement in Taiwan and France, over facilitating "illegal gambling."