Robinhood eyes European expansion for prediction markets business

• The trading platform has opened discussions with overseas regulators including the UK’s Financial Conduct Authority as it prepares to launch event-based contracts internationally
• Users have executed over four billion event contracts since the August U.S. launch, with more than half occurring in the past quarter
• Europe and the UK are priority markets where familiar betting platforms could ease customer adoption

Robinhood Markets Inc. is preparing to expand its rapidly growing prediction markets business beyond the United States after strong domestic performance since launching in August. The company has begun discussions with international regulators, including the UK’s Financial Conduct Authority, to evaluate launching event-based contracts for overseas customers.

The trading platform launched prediction markets in the U.S. through Robinhood Derivatives in partnership with Kalshi, a CFTC-regulated platform. The service allows users to speculate on real-world outcomes including elections, sports events and economic indicators.

Ambitious expansion plans

CEO Vlad Tenev revealed that Robinhood users have executed more than four billion event contracts since the launch. Over half of this activity occurred in just the past quarter, driving share price gains and demonstrating market appetite for event-based speculation.

Football derivatives have proven particularly successful for the platform. Analysts at Piper Sandler project that prediction markets could generate over £160 million in annual revenue for Robinhood if current trading volumes continue. Industry estimates suggest Robinhood already accounts for up to 35% of Kalshi’s daily trading volume.

Challenging international launch

International expansion faces regulatory complexity as different jurisdictions classify prediction markets differently. Whilst the U.S. treats event contracts as swaps under Commodity Futures Trading Commission oversight, many international regulators categorise such products as gambling.

“It’s a swap here in the United States. 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?” said JB Mackenzie, Robinhood’s vice president and general manager of futures and international.

Mackenzie emphasised compliance as the foundation for any overseas rollout.

“We’re definitely looking to offer it globally, and my goal or focus is to make sure it’s a regulatory-compliant product everywhere we go,” he added.

Europe and UK priority markets

Robinhood is prioritising Europe and the UK for initial international expansion. These markets already host established betting platforms like Betfair Exchange, where users wager on sports and political outcomes. This existing familiarity could facilitate customer adoption, though regulatory approval remains the decisive factor.

The expansion comes during growing mainstream adoption of prediction markets. Platforms including Kalshi and Polymarket have processed billions in wagers, with the 2024 U.S. presidential election driving record volumes. Polymarket has reportedly attracted deals valuing the company at $9 billion.

Competition is intensifying as Polymarket works to re-enter the U.S. market after regulatory clearance. Sports betting operators FanDuel and Underdog are also entering the space, whilst CME Group has expressed interest in sports-related event contracts.

Robinhood is taking a selective approach to market listings, avoiding ethically questionable wagers.

“Just because something goes viral, meaning it hits the various social media platforms, it doesn’t mean that’s something that we’re going to look to offer as a product,” Mackenzie added.

The company’s international ambitions reflect the growing convergence between traditional financial products and prediction markets, as platforms seek to capture expanding global demand for event-based trading.