Robinhood Markets (NASDAQ:HOOD) could nearly quadruple its prediction-market revenue this year, just as federal regulators hand the booming business its first rulebook.

A veteran Wall Street risk manager says that rulebook is backward.

The CFTC’s June 10 proposal sets up a contract-by-contract “public interest” review, its first attempt to define which event contracts can stand.

Chairman Mike Selig calls it clear rules of the road, but the trigger categories, gaming chief among them, cover most of the industry’s volume, including the World Cup betting fueling the boom.

A Wall Street Veteran Calls It Backward

Aaron Brown, a former risk manager and research head at AQR Capital Management, says the framework gets the economics exactly wrong.

The CFTC wants to weigh whether the people trading a contract actually understand the event.

Brown says that misses how markets work.

A price doesn’t average the crowd, it gets set by whoever knows the most, so one sharp trader betting against a room full of guesses is enough to make the price accurate.

The clueless money is the reward that pulls informed traders in.

His sharper point: banning a contract never stops a secret from being sold, it just moves the sale somewhere no one can watch.

Public platforms leave registered accounts and timestamped trades, the trail that caught the soldier who bet on the Maduro raid and the Google engineer who flipped unreleased search data into a $1.2 million Polymarket score.

His fix is arithmetic.

Cap each market below the cost of rigging its outcome. A single-pitch contract fails, because a pitcher allegedly threw one for $5,000. A Federal Reserve market passes, because no trader could buy a rate decision.

Why It Matters For HOOD

CEO Vlad Tenev calls Robinhood the largest retail brokerage in prediction markets, and the category is its fastest-growing business by revenue.

More than 16 billion event contracts have traded on its app this year, up from 12 billion in all of 2025, and Bernstein estimates the segment could bring in $586 million in 2026 revenue, up from $150 million, about 17% of transaction-based revenue.

The World Cup is doing the heavy lifting, and Robinhood now routes some of that action to Rothera, a CFTC-licensed exchange it and Susquehanna invested in last year through a joint venture.

The regulatory pressure is not only domestic. Spain, India, Indonesia and Brazil have all moved recently to block or shut down prediction platforms, squeezing the asset class abroad even as it explodes at home.

The June 10 CFTC proposal is still a draft, open to 45 days of public comment, so the rules, and the ceiling on Robinhood’s hottest product, will stay unsettled deep into the World Cup.

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