Robinhood CEO Vlad Tenev last week defended prediction market traders from gambling critics, arguing that speculators are essential to the functioning of any market.
The comments, made at the Wall Street Journal’s Future of Everything conference on May 5, came the same week that prediction market operator Calci closed a $1 billion funding round at a valuation of $22 billion.
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Asked whether prediction markets constitute gambling, Tenev said: “There can’t be a functioning financial market without speculators. If everyone was just hedging, the market would collapse.” “As long as you have a strategy and it’s systematic, who’s to say you shouldn’t trade that asset class?”
In an appearance on CNBC that same day, Tenev described prediction markets as a “great source of information” and signaled that Robinhood intends to continue expanding into a product line that barely existed a year ago.
The defender lands the moment they are equalized.
Tenev’s proposal comes as the industry is caught between record investor enthusiasm and increasing regulatory pressure.
Kalsi’s valuation is $22 billion, making it one of the most valuable trading platforms in the country, with more than $52 billion of event contracts traded on the exchange as of March, the company said.
Kalsi recorded a trading volume of approximately $4.47 billion last month. By comparison, rival Polymarket has $3.58 billion, and Polymarket itself has secured $2 billion in funding from NYSE parent Intercontinental. exchange exchange Exchanges are known as markets that support the trading of derivatives, commodities, securities, and other financial instruments. Exchanges are generally accessible via digital platforms or, in some cases, from a specific address where investors organize to conduct trades. One of the exchange’s primary responsibilities is to maintain honest and fair trading practices. These help ensure that the security rate allocation supported by that exchange is effective. Exchanges are known as markets that support the trading of derivatives, commodities, securities, and other financial instruments. Exchanges are generally accessible via digital platforms or, in some cases, from a specific address where investors organize to conduct trades. One of the exchange’s primary responsibilities is to maintain honest and fair trading practices. These help ensure that the security rate allocation supported by that exchange is effective. read this term It was valued at $8 billion last year.
The assessment comes as bipartisan bills, including the Prediction Markets Gambling Act and the broader STOP Unauthorized Gambling Act, are being debated in congressional committees.
Traders on the platform themselves estimate the probability that the federal government will ban sports prediction markets in 2026 to be around 11 percent.
Robinhood’s own numbers speak for themselves
The public defense comes from Robinhood’s first quarter financial results.
The platform processed 8.8 billion event contracts in the first three months of 2026, contributing the bulk of “other transactions” revenue to $147 million, a 320% year-over-year increase. Analysts estimate that the Prediction Markets segment will generate approximately $300 million in annual revenue.
The company is also moving toward operating its own exchange. Robinhood’s planned acquisition of MIAXdx, a CFTC-regulated futures and clearing venue, will allow brokers to list and clear contracts directly, rather than going through a partnership with Calsi.
When the deal was first announced last year, Robinhood’s stock price rose more than 10%.
Insider trading scandal tests the story
Defending the speculation is complicated by a series of scandals that broke in the same week as Tenev’s comments.
NPR reported on May 7 that Mr. Kalsi suspended and fined several political candidates this year for betting on his campaign, in parallel with a separate case involving the editor of YouTube creator MrBeast.
Karsi has clear rules prohibiting participants from trading at events that could affect the outcome, the company said.
Separately, federal prosecutors charged a Pentagon contractor with using classified information in polymarket transactions, a move the Justice Department described as applying national security law to a new asset class.
The case has sparked calls for an outright ban on certain types of event contracts, even as the CFTC has filed lawsuits against Arizona, Connecticut and Illinois for state overreach in federally regulated markets.
Competition builds beyond Robinhood and Kalsi
The prediction market space is no longer limited to the original two platforms. eToro acquired Israeli self-custodial wallet provider Zengo for about $70 million in April to support on-chain prediction market trading, while Crypto.com launched its own product and Gemini filed for CFTC approval to do the same.
Coinbase is also reportedly considering entering this space. DraftKings acquired C.F.T.C. C.F.T.C. The Commodity Exchange Act (CEA) of 1974 established the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activity from manipulation, fraud, and abuse of trade practices and promotes fairness in futures contracts. The CEA also includes the Thad-Johnson Agreement, which defines the authority and responsibility for oversight of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commission. The Commodity Exchange Act (CEA) of 1974 established the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activity from manipulation, fraud, and abuse of trade practices and promotes fairness in futures contracts. The CEA also includes the Thad-Johnson Agreement, which defines the authority and responsibility for oversight of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commission. read this term-Flutter, the exchange that was licensed last year and routes trades through CME Group, and FanDuel’s parent company, currently operates as a market maker.
In parallel with the institutional consolidation of formats, increased competitiveness is unfolding. ICE launched the Polymarket sentiment data tool for capital markets clients, and Calci partnered with Brazilian broker XP in March to sign an international events deal.
Robinhood has been in separate discussions with regulators in the United Kingdom and across the European Union about how it could build a prediction market outside the United States.
where the line is
For now, industry growth and regulatory risk are proceeding in parallel.
Mr. Tenev’s defense of speculators, which came as federal prosecutors were indicting individual traders for crimes, captured both sides of the debate in a week, even as investors sought to value Kalsi at $22 billion.
Whether prediction markets settle within futures boundaries or gravitate back to state gambling regimes will likely determine how far the retail event contract category can expand.
