Following strong intakes in the US forecast market, discount brokerage Robinhood is looking for ways to bring its offering overseas with its early plans to launch similar services in the UK and Europe.
The company introduced a forecast market hub earlier this year. This is a platform that allows users to trade real events results, such as interest rate decisions and sports results. Now, Robinhood is discussing with the UK Financial Conduct Authority (FCA) to determine how such products can be delivered locally, Bloomberg reported Tuesday.
However, one of the main challenges lies in the regulatory classification.
In the US, forecast markets are treated as futures products regulated by the Commodity Futures Trading Commission (CFTC). In other jurisdictions, similar products fall under the Gambling Act and may raise surveillance questions.
“So the question is where is swap monitoring, where is it in the UK? That’s the question we’ve been asking the FCA, how do we make it work?” JB Mackenzie, Vice President and General Manager of Futures at Robinhood Markets, told Bloomberg.
Mackenzie added that the UK and Europe are one of the regions that show the strongest demand for forecast market products.
I understand the interest in expanding overseas. Robinhood CEO Vlad Tenev recently said on X that the platform has already traded more than 4 billion event contracts, with more than half of its volume occurring in the third quarter alone.
Robinhood’s products mimic the structure of a decentralized forecasting market, but are built entirely on traditional financial rails rather than blockchain. The event agreement will be carried out through Kalshi, a CFTC regulatory derivative exchange, and will be settled in USD.
Still, Robinhood remains very active in the crypto and blockchain sector, offering digital asset transactions and to provide tokenized inventory.
Related: The SEC plans to allow blockchain-based stock trading amid crypto push: Report
Decentralized forecast markets win the ground
The forecast market has been surged significantly over the past year as it has been fuelled by the growth of decentralized platforms. Built on public blockchains, these markets use smart contracts to automate transactions and payments, allowing users to infer results from elections to economic data and sports.
Unlike traditional exchanges, however, decentralized platforms increase transparency and accessibility, but also face challenges such as volatility, regulatory uncertainty and uneven liquidity.
Polymarket, a major distributed platform built on polygons, peaked in November 2024 towards the US presidential election, reporting billions of dollars in monthly trading volumes.
Trader predictions were often closely tracked with the final outcome, so the accuracy and liquidity of the polymer during that cycle attracted widespread attention.
Vitalik Buterin, co-founder of Ethereum, describes the election cycle as the first, with deeper innovation lying in using financial incentives to adjust truth-seeking behaviour.
“The broader concept is that finance can be used as a way to adjust incentives to provide valuable information to audiences,” he said.
Related: The US government was ready to shut down: Will it affect the Crypto Market Structure Bill?