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Robinhood’s CEO went to bat for speculators.
Vlad Tenev defended the role of speculators in financial markets during the Wall Street Journal’s Future of Everything conference on May 5. His timing was pretty much perfect. Prediction market operator Kalshi had just closed a $1 billion funding round, pushing its valuation to $22 billion. Tenev didn’t mince words: “You can’t have a functional financial market without speculators.”
The comments land at a weird moment for prediction markets. Two bills—the Prediction Markets Are Gambling Act and the STOP Corrupt Bets Act—are sitting in Congress right now. Both could reshape how these platforms work. But money keeps pouring in. Kalshi saw over $52 billion in event contracts traded by March. Its competitor Polymarket recently secured a $2 billion funding commitment from the Intercontinental Exchange. The sector’s growing fast, even with Washington watching.
Robinhood’s own numbers tell the story. The company processed 8.8 billion event contracts in the first quarter of 2026. That helped drive a 320% jump in “other transactions” revenue, which hit $147 million. Not bad for a category that barely existed a few years ago.
Robinhood’s MIAXdx Play
Robinhood wants more control. The company plans to buy MIAXdx, a CFTC-regulated futures and clearing venue. Owning MIAXdx would let Robinhood list and clear contracts directly instead of relying on partners like Kalshi. That’s a big shift. Right now, Robinhood depends on external partnerships to offer these products. With its own CFTC-regulated venue, the company could move faster and keep more of the economics in-house.
The acquisition fits Robinhood’s broader push into new asset classes. Event contracts have gained traction with retail investors who want to bet on everything from elections to economic data releases. Robinhood sees an opening. But the move also means taking on more regulatory risk. Operating a CFTC-regulated venue comes with compliance headaches and oversight that Robinhood hasn’t dealt with before.
Insider Trading Mess
The industry’s got a problem. Insider trading cases keep popping up. Kalshi penalized political candidates for betting on their own campaigns. That’s awkward. Then the Justice Department charged a Defense Department contractor with using classified information on Polymarket. The guy allegedly traded on secrets about military operations. Not a good look.
These cases put prediction markets in a tough spot. Are they futures? Are they gambling? The legal framework remains murky. State gambling regulators want jurisdiction. The CFTC thinks it should oversee them as derivatives. And Congress is weighing in with bills that could force platforms to shut down certain markets entirely.
The regulatory uncertainty hasn’t slowed competition. eToro, Crypto.com, and Gemini are all pushing into prediction markets. Coinbase is reportedly exploring entry too. Even DraftKings and FanDuel, known for sports betting, are making moves. DraftKings bought a CFTC-licensed exchange to get into the game. FanDuel’s working on its own product.
eToro dropped about $70 million on Zengo to support on-chain prediction market trading. The deal shows how crypto platforms see blockchain as the natural infrastructure for these markets. Crypto.com launched its prediction market product a few weeks ago. Gemini filed for CFTC approval to offer similar contracts. The rush is on.
But the insider trading cases create real questions about market integrity. Can platforms police themselves? Kalshi’s enforcement actions against political candidates show companies are trying. Still, the Defense Department contractor case proves that bad actors can exploit these markets in ways traditional exchanges don’t face. Classified information isn’t something the New York Stock Exchange worries about.
The sector’s growth and its legal troubles are happening at the same time. Kalshi’s $22 billion valuation came just as federal prosecutors charged traders with fraud. That’s the contradiction. Investors see massive potential. Regulators see massive risk. The future probably depends on whether prediction markets get treated like futures—regulated but legal—or get lumped in with state gambling laws, which would kill the industry’s momentum.
Robinhood’s acquisition of MIAXdx, if it goes through, would give the company a big advantage. Owning a CFTC-regulated venue means Robinhood could navigate regulatory changes faster than competitors still relying on partnerships. The company’s already processing billions of contracts. Direct control over clearing and listing would let it scale without asking permission from other platforms.
The competitive landscape is getting crowded fast. Traditional finance companies, crypto exchanges, and sports betting platforms are all converging on prediction markets. Each brings different strengths. Crypto platforms have blockchain infrastructure. Sports betting companies understand risk management and user acquisition. Traditional brokerages like Robinhood have regulatory experience and massive user bases.
DraftKings’ move into prediction markets through its CFTC-licensed exchange shows how sports betting platforms see this as a natural extension. FanDuel’s entry signals the same thing. These companies already deal with state-by-state gambling regulations. They know how to work with regulators, even if the rules are messy.
Tenev’s defense of speculators cuts through the noise. Financial markets need liquidity. Speculators provide it. Without them, prediction markets would have wide spreads and thin order books. That makes them useless for hedging or price discovery. But speculators also create risk. They can manipulate thinly traded markets. They can exploit information asymmetries. The insider trading cases prove that.
The industry’s at an inflection point. Billions in funding. Billions in trading volume. But also federal charges and pending legislation that could shut down entire categories of contracts. Kalshi’s valuation suggests investors think the industry survives. The question is what form it takes. Regulated derivatives overseen by the CFTC? State-by-state gambling products? Something in between? Nobody knows yet.
Frequently Asked Questions
What did Vlad Tenev say about speculators at the conference?
Tenev said speculators are essential for functional financial markets, defending their role during the Wall Street Journal’s Future of Everything conference on May 5.
How much did Kalshi raise and what’s its new valuation?
Kalshi raised $1 billion in its latest funding round, bringing its valuation to $22 billion.
Why is Robinhood buying MIAXdx?
Robinhood wants to own a CFTC-regulated futures and clearing venue so it can list and clear event contracts directly instead of relying on external partners.
