Robinhood Seeks International Expansion for Prediction Markets, Engages UK Regulators
Robinhood Markets Inc. is exploring the expansion of its rapidly growing prediction markets product to jurisdictions outside the United States, including the United Kingdom, according to reports from Bloomberg. The company has initiated talks with foreign regulators, including the UK Financial Conduct Authority (FCA), to determine the compliant structure for offering prediction markets locally. JB Mackenzie, Vice President and General Manager of Futures and International at Robinhood, confirmed the firm’s global ambitions, stating that the primary goal is to ensure the product is “regulatory-compliant everywhere we go.”
Regulatory Classification: Futures or Gambling
The core operational challenge for Robinhood’s overseas expansion is the divergent legal classification of prediction markets. In the United States, event contracts are typically categorized as derivatives, such as futures or swaps, which places them under the oversight of the US Commodity Futures Trading Commission (CFTC).
However, in many international regions, including the UK and the European Union, similar products are frequently grouped with traditional gambling activities. This distinction dictates which governmental body, a financial regulator like the FCA or a dedicated gambling commission, would provide oversight.
Mackenzie noted the discrepancy, questioning where “swap oversight” would fall in the UK’s regulatory system, a key point of discussion with the FCA. Robinhood, which already offers stock and cryptocurrency trading in the UK and EU since late 2023, is working to establish a compliant regulatory path based on its status as a financial platform.
US Success and Global Demand
Robinhood’s decision to pursue international growth is driven by intense global demand and the explosive uptake of the product within the US market. Since launching prediction markets earlier this year through partnerships with CFTC-regulated venues like Kalshi and ForecastEx, Robinhood has brokered over 4 billion event contracts. The initial focus on election outcomes has since expanded to include predictions on sports, economics, and asset price volatility for commodities and cryptocurrencies.
This rapid traction at home, with the US prediction market space becoming increasingly crowded, incentivizes Robinhood to seek new avenues for growth.
The company has observed particularly strong interest from customers in the United Kingdom and Europe. Robinhood currently curates which markets are listed from its partners, actively avoiding contracts deemed controversial or susceptible to manipulation, a strategy aimed at maintaining a perception of integrity as a financial platform rather than a pure betting operator.
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