Discount brokerage Robinhood is considering expanding its prediction market services overseas, eyeing the UK and Europe. The main challenge is regulatory classification, as prediction markets are treated as futures products in the US but could be considered gambling in other jurisdictions. Robinhood has seen strong demand for prediction market products in the UK and Europe. CEO Vlad Tenev reported over 4 billion event contracts traded, with half in Q3 alone.

Although Robinhood’s prediction market product is not built on blockchain, it is executed through a CFTC-regulated derivatives exchange. Despite this, Robinhood remains active in the crypto and blockchain sectors, offering digital asset trading and exploring tokenized stock offerings. The SEC is also considering blockchain-based stock trading amid the crypto push.

Decentralized prediction markets have gained popularity, especially on platforms like Polymarket built on public blockchains. These markets use smart contracts for automated trades and payouts, allowing users to speculate on various outcomes. However, decentralized platforms face challenges such as regulatory uncertainty and uneven liquidity, despite offering greater transparency and accessibility.

During the US presidential election cycle in November 2024, Polymarket on Polygon reported billions in monthly trading volume, with high accuracy and liquidity. Ethereum co-founder Vitalik Buterin sees using finance to align incentives for truth-seeking behavior as a broader concept beyond election cycles. The deeper innovation could provide viewers with valuable information through financial incentives.

Read more at Cointelegraph: Robinhood Plans UK, EU Expansion for Prediction Markets