US brokerage Robinhood has opted to exclude certain prediction markets from its platform amid concerns about potential market manipulation and insider trading. The decision reflects the company’s cautious approach as it expands into the rapidly growing sector of event-driven trading.

Jordan Sinclair, president of Robinhood UK, emphasized the firm’s focus on preventing market abuse and protecting users from unfair advantages. “We do not necessarily offer all prediction markets or all event contracts,” Sinclair said, noting that some contracts are deemed unsuitable for Robinhood’s customer base. He highlighted “mention markets”—contracts that involve betting on specific words or phrases to be used during speeches or events—as a particular area of concern that the company has chosen to exclude.

Mention markets, which have gained popularity on platforms such as Kalshi and Polymarket, allow traders to wager on the occurrence of specific terms during events like White House press briefings or corporate earnings calls. These contracts are considered vulnerable to misuse due to the potential for insiders to act on privileged information.

Concerns around insider trading and potential leaks have intensified following several high-profile incidents. In February, Israeli authorities charged two individuals for allegedly using classified information to place bets on military operations via the Polymarket platform. Similarly, last year the organizers of the Nobel Peace Prize investigated unusual betting activity surrounding Venezuelan opposition leader María Corina Machado after a surge in wagers occurred shortly before her award announcement. Additionally, a former editor at YouTube channel MrBeast was fined $20,000 earlier this year for insider trading on Kalshi, which offers contracts related to the content of future videos.

Robinhood began offering prediction markets last year through a partnership with Kalshi, the largest regulated prediction market in the US, which requires users to verify their identity and address before trading. The company also has a smaller partnership with ForecastEx but does not collaborate with Polymarket, Kalshi’s main competitor. Polymarket allows international users to trade by connecting crypto wallets, often bypassing traditional identification procedures, and accepts cryptocurrency deposits and withdrawals, which limits its oversight of customer banking information. Many users reportedly access Polymarket from restricted countries, including the US and UK, by employing VPNs.

The prediction market sector is viewed by Robinhood and others as a significant growth opportunity, with the company projecting annual revenue of $300 million in this space. Nonetheless, Robinhood’s cautious stance illustrates the ongoing challenges regulators and industry players face in balancing innovation with the need to prevent market abuses in these emerging financial products.