Robinhood Enters Betting with Prediction Market

Robinhood, the trading app that made a name for itself by “democratizing finance” and bringing Wall Street to the fingertips of everyday investors, is now taking a bold—and controversial—leap into the world of prediction markets. On Monday, the company announced a new feature called the "Prediction Hub", where users can trade on the outcomes of major world events, from Federal Reserve rate decisions to March Madness brackets.

While Robinhood paints this as a new way to “invest” in real-world outcomes, many see it for what it closely resembles: a gamified form of legal betting.

Not Gambling—Just “Trading Contracts”

At launch, the Prediction Hub will allow users to trade contracts on:

• The upper bound of the Fed’s target interest rate in May
• The results of both the men’s and women’s NCAA March Madness tournaments

These contracts are being offered by Kalshi, a federally regulated exchange overseen by the Commodity Futures Trading Commission (CFTC). That regulation is Robinhood’s key defense against the notion that it's turning into a betting app. But the lines are blurry.

Instead of placing bets with a bookmaker, users are buying “derivatives contracts” tied to specific outcomes—just like futures contracts for oil or corn, but with more cultural volatility. This technicality is what allows Robinhood to claim this isn't gambling, even though it functionally feels identical to wagering.

Kalshi: Regulated but Controversial

Kalshi, the partner behind these contracts, has its own share of controversy. The company previously attempted to offer contracts on U.S. election outcomes—a move the CFTC pushed back on, calling it a “Trojan horse” for gambling under the guise of finance.

To reassure regulators, Kalshi added Donald Trump Jr. to its board of advisers—a move that raised more eyebrows than it calmed. While not illegal, the optics suggest a strategy of political influence more than regulatory compliance.

Robinhood’s History of Risky Moves

This isn’t Robinhood’s first brush with speculative products. The platform previously allowed users to place bets on the presidential election and even tried to offer Super Bowl prediction contracts before regulators told it to back off. That effort, too, was enabled through Kalshi—and now, with a change in CFTC leadership, the regulatory winds appear to be more favorable.

For now, a federal judge has upheld the legality of these kinds of contracts, clearing the path for Robinhood’s latest feature. And with other prediction markets like Polymarket still technically banned in the U.S., Robinhood is poised to dominate this newly opened niche.

A Slippery Slope?

Robinhood's new feature raises serious questions about the company’s mission and the broader state of retail investing. What started as a platform to make stock trading accessible is rapidly evolving into something that resembles a digital casino—with high-risk assets like crypto and now, event-driven contracts, aimed squarely at a demographic that often lacks the financial literacy to navigate them safely.

The concern isn’t just the volatility of these contracts—it’s the context. A company that once halted trades on meme stocks like GameStop to protect institutional interests is now empowering retail traders to wager on everything from economic policy to basketball games.

It’s not hard to see the irony. Robinhood claims to stand for “investing for all,” but it increasingly looks like it’s creating a playground where the least informed investors take the biggest risks.

The Takeaway

Whether you call it a prediction market or legalized betting, Robinhood’s new Prediction Hub is another step in the gamification of finance. For a platform built on the promise of financial empowerment, this feels more like financial entertainment—with real money on the line.