Robinhood Markets Inc., best known for reshaping retail stock trading, is now preparing to take its fast-growing prediction markets business beyond U.S. borders. The company has already opened discussions with overseas regulators, including the UK’s Financial Conduct Authority (FCA), as it evaluates how to bring event-based contracts to international customers.

The push comes as Robinhood looks to capture a bigger slice of the booming prediction markets space, which increasingly blurs the lines between regulated financial products and traditional wagering.

Strong U.S. Debut Fuels Global Ambitions

In August, Robinhood launched prediction markets in the United States through Robinhood Derivatives, working with Kalshi, a CFTC-regulated platform. The offering allows traders to speculate on real-world outcomes such as elections, sports, and economic indicators.

CEO Vlad Tenev revealed this week that Robinhood users have already executed more than four billion event contracts, with over half of that activity recorded in just the last quarter. The milestone drove Robinhood shares higher, underscoring the market’s appetite for event-based speculation.

The initial focus on football derivatives has proven particularly lucrative. Analysts at Piper Sandler cited by The Block recently projected that prediction markets could generate more than $200 million in annual revenue for Robinhood if current trading volumes persist. By some estimates, Robinhood already accounts for up to 35% of Kalshi’s daily trading volume.

Navigating Global Regulations

While the U.S. framework treats event contracts as swaps overseen by the Commodity Futures Trading Commission (CFTC), international regulators often categorize such markets as gambling products. That discrepancy has become a central issue as Robinhood evaluates its global strategy.

“It’s a swap here in the United States. So the question would be where is swap oversight, let’s say in the UK? That’s a question that we’ve been asking the FCA, how do we work it?” said JB Mackenzie, Robinhood’s vice president and general manager of futures and international.

Mackenzie emphasized that compliance will be the foundation of any overseas rollout. “We’re definitely looking to offer it globally, and my goal or focus is to make sure it’s a regulatory-compliant product everywhere we go,” he told Bloomberg.

Robinhood is prioritizing Europe and the UK as its first international targets, markets where bettors are already accustomed to platforms like Betfair Exchange, which allow wagers on sports and politics. That familiarity could smooth customer adoption, but regulatory clarity remains the decisive hurdle.

Rising Competition and Growing Demand

Robinhood’s expansion drive comes as prediction markets gain mainstream traction. Platforms such as Kalshi and Polymarket have processed billions in wagers, with the 2024 U.S. presidential election fueling record volumes. Polymarket, in particular, has become a crypto-native favorite, reportedly considering deals that could push its valuation to $9 billion.

Competition is intensifying, however. Polymarket is working to re-enter the U.S. market after clearing regulatory obstacles, while sports betting giants like FanDuel and Underdog are also entering the space. Even CME Group has expressed interest in sports-related event contracts, potentially in partnership with FanDuel.

The growing roster of players highlights why Robinhood is moving quickly to secure its position. Unlike some rivals, the company is carefully curating which markets to list, steering clear of ethically problematic wagers. “Just because something goes viral, meaning it hits the various social media platforms, it doesn’t mean that’s something that we’re going to look to offer as a product,” Mackenzie said.