Robinhood has been dabbling for months in the field of prediction markets, which let users wager on the outcome of future events. Now, the company is going all in, unveiling a dedicated hub on Monday that offers contracts related to the March Madness college basketball tournament, and one to predict the direction of the Federal Reserve’s target interest rate. The finance app is planning to add a variety of other contracts related to markets, sports, and politics in coming months.
Prediction markets are based on the premise that, because those who put money on them have a vested interest in the outcome, they can provide a more accurate guide to the future than polls or surveys. They are not a new idea but, due to regulatory issues, did not gain traction in the U.S. until the last presidential election, when platforms like Polymarket and Kalshi attracted billions of dollars of bets and, in doing so, correctly forecast Donald Trump's victory.
