After the success of the crypto-based platform Polymarket, trading venue Robinhood (HOOD) is now making its foray into prediction markets by launching a new feature available through the CFTC-regulated exchange Kalshi. The company announced that contracts would begin rolling out today, marking a significant expansion of its trading offerings.
Robinhood’s prediction markets hub aims to empower customers to bet on various event outcomes, as reported in a press release. This initiative introduces a new competitor to Polymarket, which has established itself as the world’s largest prediction market, especially during last year’s U.S. presidential election and a host of other significant news events.
The rapid rise of Polymarket drew attention and scrutiny, with an analysis by NBC News indicating that the platform attracted over $3.6 billion in bets during the presidential election alone. This surge in popularity raised questions about the transparency of bet identities and the potential influence these bets may have on electoral outcomes. Notably, Polymarket CEO Shayne Coplan’s New York City apartment was raided by the FBI, which confiscated his phone and other electronic devices as part of an investigation into the platform.
In light of these developments, Robinhood has confirmed that it has been in discussions with the U.S. Commodity Futures Trading Commission (CFTC) in recent weeks. “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,” stated JB Mackenzie, Vice President & General Manager of Futures and International at Robinhood.
To celebrate the launch of this new product, traders on Robinhood will have the opportunity to place bets on various outcomes, including the potential upper bound of the target federal funds rate in May, as well as on the upcoming men’s and women’s College Basketball Tournaments.
Following the announcement, shares of the trading app experienced a boost, rising 2.3% on Monday to reach $40.17. With this new venture into prediction markets, Robinhood is positioning itself to become a key player in the evolving landscape of event-based trading.
