US broker Robinhood has excluded some prediction markets from its push into the fast-growing sector over concerns they encourage manipulation and insider trading.
Jordan Sinclair, president of Robinhood UK, said the company was “very focused on market abuse, insider trading”.
“We don’t necessarily offer all prediction markets or all event contracts. There are some we’ve chosen aren’t right for our customers and that is, I think, the way you can kind of navigate that world,” he said.
Suspiciously well-timed bets on prediction markets have sparked fears that insiders could be using privileged information, gaining an unfair advantage over other users and posing a threat to the security of sensitive information.
The FT reported last month that the US attack on Iran was preceded by a number of unusually large and well-timed bets on prediction market Polymarket. In February, Israeli authorities charged two people with using classified information to bet on military operations on Polymarket.
Last year, the organisers of the Nobel Peace Prize investigated a potential leak after bets on Venezuelan opposition leader María Corina Machado surged in the hours before her award was announced.
Sinclair cited so-called mention markets as a particular type of event contract that Robinhood did not offer “for exactly some of those concerns”.
Traders use mention markets, which are popular on both Kalshi and Polymarket, to place wagers on the words that will be used during certain speeches or events, such as a White House press briefing or a corporate earnings call.
In February, a since-fired editor at MrBeast, the most subscribed channel on YouTube, was fined $20,000 and reported by Kalshi to federal regulators for insider trading. Kalshi offers multiple contracts on what MrBeast will say in future videos.
Sinclair added that “there are other types of brokers or platforms that may not necessarily be regulated or offer regulated contracts that may choose to do something different”.
Robinhood partnered with Kalshi to offer prediction markets last year, a move into what the company sees as a key growth area that it expects to generate $300mn in annual revenue. It has a smaller deal with rival ForecastEx. It has no deal with Polymarket, Kalshi’s main competitor.
Kalshi, the largest regulated US prediction market, requires prospective traders to verify their identity and address. Polymarket, meanwhile, allows people to trade on its popular international site — which traders in restricted countries including the US and UK report accessing through VPNs — by connecting a crypto wallet, often without requiring any further identification.
Funds can also be deposited and withdrawn using a basket of cryptocurrencies, so Polymarket does not learn customer banking details.
Through the US-regulated Kalshi and ForecastEx, Robinhood users can bet on the outcomes of sports games, elections, entertainment and financial events as well as other occurrences such as whether the US will confirm the existence of aliens before 2027.
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Late last year, Robinhood and quantitative trading firm Susquehanna International Group purchased a futures and derivatives exchange, LedgerX, in an effort to reduce the brokerage’s reliance on Kalshi.
Prediction markets were Robinhood’s “fastest growing business ever” in 2025, with more than 12bn contracts traded on the platform, according to chief executive Vlad Tenev.
“We’re just at the beginning of a prediction market supercycle that could drive trillions in annual volume over time,” Tenev said on an earnings call in February.
Source: https://www.ft.com/content/84ddcfaf-f16a-481e-9986-c3e8af5653ac
