What are prediction markets?

Prediction markets are exchange-traded contracts that allow individuals to bet on the probability of future events.

How does Robinhood's prediction market work?

Users buy and sell contracts that pay out if a certain event occurs, with prices reflecting the market's belief about the outcome.

Are prediction markets legal?

The legality of prediction markets varies by jurisdiction, but Robinhood operates within a compliant framework.

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Prediction Markets

Sport

Connecticut Orders Kalshi, Robinhood and Crypto.com to Cease Sports Betting

by Luis Mendoza - Sport Editor December 4, 2025

written by Luis Mendoza - Sport Editor

Connecticut Issues Cease and Desist Orders to Robinhood, Kalshi, and Crypto.com Over Sports Betting

HARTFORD, CT – In a move that’s sending ripples through the burgeoning world of prediction markets, Connecticut officials have launched a legal challenge against Robinhood, Kalshi, and Crypto.com, accusing them of offering unlicensed sports betting to state residents. The Department of Consumer Protection issued cease and desist orders Wednesday, demanding the companies immediately halt all related advertising and services. This is breaking news with significant implications for the future of online betting and the ongoing debate over regulatory authority.

The State’s Stance: Unlicensed Betting and Consumer Protection

Connecticut’s Commissioner of the Department of Gaming Control, Bryan T. Cafferelli, was blunt in his assessment: “None of these entities have a license to offer betting in our state, and even if they did, their contracts violate numerous other state laws and policies, including offering betting to persons under the age of 21.” The state is clearly prioritizing consumer protection and maintaining control over the rapidly expanding sports betting landscape. Currently, DraftKings (through Foxwoods), FanDuel (Mohegan Sun), and Fanatics (Connecticut Lottery) are the only companies authorized to offer sports betting within the state.

Robinhood Fires Back: Federal Regulation as Shield

Robinhood, known for its popular stock trading platform, is pushing back, asserting that its “event contracts” are already regulated at the federal level by the Commodity Futures Trading Commission (CFTC). A spokesperson stated that Robinhood Derivatives, LLC, is a CFTC-registered entity, providing a “safe, compliant and regulated manner” for customers to participate in prediction markets. This highlights a core tension: the clash between state and federal regulatory powers. It’s a legal argument we’re seeing play out across the country, and it’s crucial to understand the nuances of these regulations.

A Wider Legal Battle: New York, Nevada, and the CFTC

Connecticut isn’t alone in challenging these platforms. New York State is currently embroiled in a similar dispute with Kalshi, with the crypto platform actively suing the state. Both Kalshi and Crypto.com are designated contract markets (DCM) regulated by the CFTC, and Kalshi argues that state interference undermines federal oversight. However, a recent ruling in Nevada dealt a blow to this argument, with a federal judge asserting state jurisdiction over some sporting event contracts. Kalshi is appealing that decision, signaling a long and complex legal fight ahead.

Polymarket’s Bold Move: Expanding Despite Uncertainty

Interestingly, while these legal battles rage on, Polymarket, the largest cryptocurrency prediction market, took a contrasting approach on Wednesday, launching its app in over 20 US states in anticipation of a broader official relaunch. This suggests a calculated risk, potentially banking on a favorable resolution to the regulatory challenges. It also demonstrates the continued demand for these types of platforms, even amidst legal uncertainty.

Understanding Prediction Markets: Beyond Traditional Sports Betting

For those unfamiliar, prediction markets aren’t simply about betting on game outcomes. They allow users to trade contracts based on the probability of future events – everything from election results to economic indicators. They’ve gained traction as a potential tool for forecasting and information aggregation, but their classification as either “betting” or “financial instruments” remains a key point of contention. The CFTC generally views them as derivatives, while states often categorize them as gambling, triggering licensing requirements. This difference in perspective is at the heart of the current legal conflicts.

The outcome of these cases will undoubtedly shape the future of online prediction markets and sports betting in the United States. As states and the federal government grapple with how to regulate this evolving landscape, consumers and investors alike should stay informed about the legal risks and potential rewards. For the latest updates on this developing story and other crucial financial and legal news, keep checking back with archyde.com – your source for timely and insightful reporting.

December 4, 2025 0 comments

Economy

Revolution in Forecasting: How Prediction Markets Are Shaping the Future of Business Growth

by Daniel Foster - Senior Editor, Economy November 6, 2025

written by Daniel Foster - Senior Editor, Economy

Robinhood’s Prediction Markets Surge,Poised to Become a Major Asset Class

New york,NY – November 6,2025 – Robinhood,the popular investment platform,is experiencing remarkable growth in its prediction markets,with its Chief Executive Officer suggesting they could evolve into one of the largest asset classes available to investors. The company disclosed meaningful volume increases during its recent third-quarter earnings call, signaling a significant shift in investor behavior and market dynamics.

Explosive Growth in Prediction Market Volume

Since their initial launch last year, focusing on United States Presidential Election outcomes, Robinhood’s prediction markets have witnessed a consistent doubling of contract volumes each quarter. October alone saw an extraordinary 2.5 billion event contracts traded, following 2.3 billion in the preceding quarter, according to company reports. This exponential rise illustrates a growing appetite for this novel form of investment.

Vlad Tenev, Chairman and CEO of Robinhood, expressed enthusiasm about the market’s potential, stating the platform is excited to be an early participant in what some believe could become a significant financial sector. he emphasized the unique ability of prediction markets to assign a price to risk across a diverse range of events.

Diversification Fuels Robinhood’s Expansion

The success of prediction markets is just one element of Robinhood’s broader strategy to diversify its revenue streams. The financial technology firm has added several new business lines in the past year, including prediction markets and cryptocurrency exchange Bitstamp, acquired in a $200 million deal. Previously,Robinhood expanded with fully paid securities lending,Gold subscriptions,and instant withdrawals.

Currently, Robinhood boasts 11 distinct business lines each generating over $100 million in annualized revenue. Prediction markets achieved this milestone in under a year, making it the fastest-growing business line in the company’s history, and is now tracking toward a $300 million annual run rate.

Did you Know? The concept of prediction markets dates back to the 1980s,initially used by researchers to forecast election outcomes with remarkable accuracy.

Business Line	Year Added	Annualized Revenue (approx.)
Prediction Markets	2024	$100M+ (tracking towards $300M)
bitstamp (Crypto Exchange)	2024	$100M+
Fully Paid Securities Lending	2024	$100M+
Gold Subscriptions	2024	$100M+
Instant Withdrawals	2024	$100M+

Expanding Beyond Politics and Sports

robinhood initially focused prediction markets on political events like the Presidential election. However, the company has strategically broadened its categories to include a wide array of options for investors, now encompassing sports outcomes, economic indicators, and popular culture trends. This expansion is designed to cater to a wider range of interests and investment strategies.

Pro Tip: When participating in prediction markets, carefully consider the data available and understand the potential risks involved. These markets, while offering unique opportunities, are still subject to uncertainty.

Understanding Prediction Markets

prediction markets allow users to trade contracts based on the outcome of future events. The price of a contract reflects the collective belief of participants regarding the likelihood of a specific outcome. Unlike traditional gambling, prediction markets frequently enough involve sophisticated analysis and risk management strategies. They are increasingly seen as a tool for forecasting and informed decision-making in various fields, from politics to business. The growing institutional interest in these markets points to a future where they play a larger role in risk assessment and strategic planning.

Frequently Asked Questions About Robinhood’s prediction Markets

What are prediction markets? Prediction markets are exchange-traded contracts that allow individuals to bet on the probability of future events.
How does Robinhood’s prediction market work? Users buy and sell contracts that pay out if a certain event occurs,with prices reflecting the market’s belief about the outcome.
Are prediction markets legal? The legality of prediction markets varies by jurisdiction, but Robinhood operates within a compliant framework.
What are the risks associated with prediction markets? As with any investment,there is a risk of losing money if the predicted event does not occur.
How is Robinhood diversifying its business? robinhood is growing beyond traditional brokerage services into areas like cryptocurrency, lending, and prediction markets.
What is the potential of prediction markets as an asset class? Experts suggest they could become a significant asset class due to their ability to price risk in almost any scenario.

What do you think about the potential of prediction markets? Will they truly become a major asset class, or are they a passing trend?

Share your thoughts in the comments below and let’s discuss the future of investment!

November 6, 2025 0 comments

Economy

Draftkings prohibits credit card deposit in the United States

by Daniel Foster - Senior Editor, Economy August 26, 2025

written by Daniel Foster - Senior Editor, Economy

DraftKings Ends Credit Card Deposits, Faces Fine, & Bets Big on Prediction Markets – Breaking News

Boston, MA – In a significant shift for the online gambling industry, DraftKings announced today it will cease accepting credit card deposits for its sportsbook and casino operations across the United States, effective August 25, 2025. This decision comes on the heels of a $450,000 fine from the Massachusetts Gaming Commission (MGC) for previously accepting illegal credit card deposits, and as the company simultaneously pushes forward with plans to enter the burgeoning prediction market.

Credit Card Ban: Protecting Consumers or Damage Control?

DraftKings frames the move as a proactive step to protect customers from accruing high-interest debt and cash advance fees associated with credit card use. “DraftKings made a strategic decision to remove credit cards…as a means of deposit,” a company spokesperson told SIGMA News. Customers will still be able to fund their accounts via debit cards, bank transfers (ACH), PayPal, Venmo, and Apple Pay. However, the timing raises eyebrows. The MGC penalized DraftKings for accepting over $83,000 in unlawful credit card deposits in 2023 and 2024 – a direct violation of Massachusetts state law.

While DraftKings self-reported the violations and initiated a refund to 218 affected customers, regulators found that initial software fixes were insufficient. The company is now undergoing a third-party audit of its Massachusetts operations. Interestingly, a DraftKings spokesperson downplayed any connection between the fine and the broader credit card ban, stating it “didn’t affect” the decision. Similar bans are already in place in Tennessee, Iowa, New Hampshire, Oregon, Rhode Island, Vermont, and Illinois, demonstrating a growing trend towards restricting credit card access to gambling platforms.

The Rise of Prediction Markets: DraftKings’ Next Big Bet

Beyond the credit card controversy, DraftKings is aggressively pursuing a new avenue for growth: prediction markets. The company has filed an application with the National Futures Association (NFA) to operate as a swap company and introduction broker through GUS III HOLDINGS LLC. This move, while seemingly separate from the credit card issue, highlights DraftKings’ ambition to diversify its revenue streams and capitalize on emerging opportunities in the financial technology space.

This isn’t DraftKings’ first attempt. A previous application under GUS II Holdings was withdrawn. The current application boasts the backing of key executives, including CEO Jason Robins, CFO Alan Ellingson, and co-founder Paul Liberman. Robins has publicly stated the company is “actively considering entering the prediction market.” The potential for profit is substantial; Robinhood, which connects users to the Kalshi prediction market, processed $1 billion in transactions in Q2 2024, generating approximately $10 million in revenue.

Competition Heats Up in the Predictive Space

DraftKings isn’t alone in eyeing the prediction market. Competitor FanDuel has partnered with CME Group to launch a new event contract platform. Underdog and Prizepicks have also submitted applications, and Fanatics Betting & Gaming is making moves in the space. The NFA application process is rigorous, requiring thorough background checks and adherence to strict ethical standards. DraftKings is also reportedly exploring the acquisition of Railbird, a CFTC-approved prediction market platform.

Strong Q2 Earnings Despite Regulatory Headwinds

Despite the regulatory challenges, DraftKings reported strong second-quarter earnings, exceeding expectations with $1.13 billion in sales – a 37% year-over-year increase. Net income soared to $158 million, a significant improvement from $63.8 million in the same quarter last year. Adjusted EBITDA doubled to $31 million. This financial performance underscores DraftKings’ continued growth and market dominance, even amidst increased scrutiny.

DraftKings’ strategic pivot away from credit card deposits, coupled with its aggressive expansion into prediction markets, signals a dynamic shift in the company’s approach to risk management and revenue generation. The coming months will be crucial in determining whether these moves will solidify DraftKings’ position as a leader in the evolving landscape of online gambling and financial technology. Stay tuned to archyde.com for the latest updates on this developing story and in-depth analysis of the igaming industry.

August 26, 2025 0 comments