DraftKings Inc. (NASDAQ:DKNG) saw its stock decline 8%, while Flutter Entertainment (NYSE:FLUT) fell 7% on Tuesday, following Robinhood Markets’ (NASDAQ:HOOD) disclosure of strong trading volumes for September and its plans to expand prediction markets internationally.
Robinhood reported around 187 million option contracts traded between September 1 and September 25, reflecting the platform’s growing traction among investors. The company also revealed it is exploring taking its prediction markets product to countries outside the U.S., engaging with regulators including the UK’s Financial Conduct Authority.
The market response underscores concerns that Robinhood is increasingly positioning itself as a competitor to sports-betting operators such as DraftKings and Flutter’s FanDuel. By allowing users to trade contracts based on the outcomes of sporting events, Robinhood may be diverting participants from traditional sports betting platforms.
Regulatory treatment of prediction markets differs globally. In the U.S., they are generally considered futures products, while in other regions they are often treated as gambling, creating both challenges and potential opportunities for Robinhood’s international expansion strategy.
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