Robinhood has pulled certain prediction market contracts from its platform over concerns about market manipulation and insider trading, even as the brokerage projects the fast-growing product category could generate $300 million in annual revenue.
Key Takeaways:
- Robinhood excluded “mention markets” from its platform, citing insider trading and market manipulation risks
- Suspiciously timed Polymarket bets before the U.S. strike on Iran and Israeli insider trading charges have intensified scrutiny across the sector
- Prediction market volumes have surged past $20 billion per month, up from $1.2 billion in early 2025
Robinhood Mention Markets Dropped Over Manipulation Risk
Robinhood UK President Jordan Sinclair told the Financial Times on Sunday that the company is “very focused on market abuse, insider trading.” He added: “We don’t necessarily offer all prediction markets or all event contracts. There are some we’ve chosen aren’t right for our customers,” but did not disclose when the decision was made or whether other contract categories have also been restricted.
The excluded markets are instruments that allow users to wager on whether certain words will appear during events such as corporate earnings calls or political speeches and other high-profile occasions – like whether NASA officials would say “president,” “radiation,” or “damage” in the Artemis II postflight briefing. The products are popular on both Kalshi and Polymarket but are particularly vulnerable to exploitation by anyone with advance knowledge of what will be said.
The decision follows a series of incidents that have drawn regulatory attention to the prediction market sector. In February, several unusually large and well-timed wagers appeared on Polymarket ahead of the U.S. military strike on Iran. Israeli authorities subsequently charged two individuals with using classified defense information to place bets on military operations through the platform.
Robinhood entered prediction markets last year through a partnership with Kalshi, the CFTC-regulated exchange that controls approximately 89% of the U.S. prediction market, according to a Bank of America report cited by Coindesk. The brokerage also has a smaller deal with ForecastEx but does not work with Polymarket, which allows users to trade through cryptocurrency wallets with minimal identity verification requirements.
The selective approach reflects the reputational calculus facing a publicly traded company that spent years rebuilding trust after the 2021 GameStop trading restrictions controversy. CEO Vlad Tenev has called prediction markets Robinhood’s “fastest-growing business ever,” with 12 billion contracts traded in 2025.
The integrity concerns come at a moment of acute legal uncertainty for the industry, after a federal judge on Friday blocked Arizona from proceeding with the first criminal arraignment of a prediction market operator, alongside other legal challenges. The ultimate question is whether prediction markets operate under a single federal framework or fragment into a jurisdiction-by-jurisdiction model resembling the U.S. sports betting landscape.
For Robinhood, monthly trading volumes across prediction platforms have climbed past $20 billion, but the issue of what constitutes insider trading in event contracts still remains unresolved. This means the sector remains exposed to the kind of incidents that could trigger a broader regulatory crackdown.
