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Wall Street JournalRobinhood CEO Brushes Off Concerns Prediction Markets Are Gambling: 'They Have Societal Value Across All Categories'
During a recent interview, Robinhood Markets (NASDAQ:HOOD) CEO Vlad Tenev shared more details on the company's new product expansion, including prediction markets on items like elections and sports contests.
What Happened: Evolving from a stock brokerage app and crypto trading platform, Robinhood has transformed into new products like retirement accounts, prediction markets and online banking.
Tenev took part in an interview with the "Decoder" podcast from The Verge around the time that several states sought to ban Robinhood's prediction markets on March Madness college basketball outcomes.
"For prediction markets, we're operating under the CFTC regime, which is the Commodity Futures Trading Commission," Tenev said. "They regulate futures and swaps, and prediction markets fall under that purview."
Tenev said Robinhood registered to be a futures commission's merchant and is partnered with Kalshi on prediction markets. Robinhood relies on designated contract markets (DCMs), which act like an exchange, while Robinhood acts as a broker, he added.
"Obviously, the line between prediction markets and what should be federally CFTC regulated and what should be under the purview of states who have gaming – which is regulated and taxed at a state level – that line is going to be debated right now."
Tenev said Robinhood believes in prediction markets, but with a belief that details had to be worked out, chose to shut down markets in New Jersey. "I do believe prediction markets are the future, and they have societal value across all categories."
The launch of prediction markets was similar to other launches the company has done, like crypto, which have a "state by state component to it." The Robinhood CEO said it wasn't a surprise that at least one state had concerns.
"The line between gaming and gambling and finance is a debated thing,” Tenev pointed out. “There’s people that will go on Twitter and say, ‘Anytime you're taking a risk, it's a form of gambling.'"
Why It's Important: Tenev highlighted that the derivatives market was, in part, created to help farmers hedge their exposure to limit risk.
Along with hedging, Tenev said there is speculation.
"Speculation is people just making predictions on what the price going to be in the future. Without the speculators, it's not an effective market for hedgers."
Tenev said people should be able to "do what they want with their money," whether it’s saving, investing, or the prediction markets.
"I think prediction markets does have significant societal value. It's an evolution of what the newspaper served in the past."
Tenev said that prediction markets for business, arts, leisure, style, and sports act like newspapers and, in many cases, give the news to consumers faster.
"I would distinguish prediction markets from gambling in that way. I have mixed feelings obviously about gambling in general, but prediction markets I'm a big believer in."
HOOD Price Action: Robinhood stock traded at $44.02 on Tuesday versus a 52-week trading range of $13.98 to $66.08. Robinhood stock is up 11.6% year-to-date in 2025 and shares are up over 150% in the last year.
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