Robinhood Launches New Prediction Market in Competition with Polymarket
In an exciting development for the trading landscape, Robinhood (HOOD) has announced the launch of a new prediction market on its platform. This initiative will be facilitated through the CFTC-regulated exchange Kalshi, with contracts becoming available starting today. The prediction markets hub will empower customers to place bets on various event outcomes, according to a recent press release issued by the company.
This move positions Robinhood as a competitor to Polymarket, which currently holds the title of the world’s largest prediction market. Polymarket gained substantial traction last year, particularly during the U.S. presidential election, where it became a focal point for high-stakes betting on a range of significant news events. The platform’s skyrocketing popularity led to intense scrutiny, with NBC News reporting that Polymarket attracted over $3.6 billion in bets related to the presidential election alone.
The surge in activity on Polymarket raised questions about the identities behind the bets and sparked concerns about the potential influence these predictions could have on actual election outcomes. In a dramatic twist, the CEO of Polymarket, Shayne Coplan, experienced a raid on his New York City apartment by the FBI, resulting in the seizure of his phone and other electronic devices.
Robinhood has emphasized that it has been in discussions with the U.S. Commodity Futures Trading Commission (CFTC) in recent weeks, signaling its commitment to regulatory compliance. “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 and General Manager of Futures and International at Robinhood.
To mark the launch of this innovative product, traders will initially have the opportunity to place bets on the projected upper limit of the target federal funds rate in May, alongside predictions related to the forthcoming men’s and women’s College Basketball Tournaments. This strategic move indicates Robinhood’s aim to capture the interest of sports enthusiasts and financial traders alike.
Following the announcement, shares of the trading app saw a 2.3% increase on Monday, reaching a price of $40.17.
