FinTech TV Host: Welcome to FinTech TV. Prediction markets have officially evolved from a niche trading experiment into a mainstream financial phenomenon. Well, with the 2026 midterm elections just weeks away and football season in full swing, macro volatility running hot, retail investors are increasingly turning to vet contracts to. Real-time headlines and hedge risks. Well, with expanding event hubs, Fed rate contracts, as well as for features on the horizon, how is the wisdom of the crowd reshaping retail investing? Well, joining us from Money 2020 is JB McKenzie, VP and General Manager of Futures and Prediction Markets at Robinhood. JB, great to have you here. Thank you so much for joining me.
JB McKenzie: Thanks for having me.
FinTech TV Host: Well, we are in Las Vegas for Money 2020, but we have some key events coming down the pike. And of course it is football season and midterm elections spur around the corner. But when it comes to what's happening on your platforms, give us a sneak peek.
JB McKenzie: Well, I mean, what we're really seeing is continued engagement with the event contracts products, so I think we've announced this previously, it's the fastest growing product that Robinhood's ever launched, and the reason we think it is is because it's so diversified in the different types of products you can have. So just recently we launched our midterm elections hub, and that's given us an opportunity to show customers what the races look like in each of their districts. You can get down to the very granular level of a district by district race to see what is going to occur or where the, what the crowd is believing. And there's a lot of news coming out of it that's showing, you know, directionally this, there may be a change, but you as an investor can really dig down deep and understand where you might want to extend or maybe take it, make a trade or something along those lines.
FinTech TV Host: And JB, of course, when we think back to the 2024 presidential election cycle, prediction markets famously caught the electoral momentum weeks before traditional pollsters. So as we count down to election day 2026, give us a sense of what is unfolding.
JB McKenzie: Well, look, we, as you said, that 2024 election was, was amazing because what it showed to us was the power of the individual investor and how they were ahead of the polls. And I think as we've watched, uh, the election markets start to mature, we're really starting to see that same thing hold true. Um, I was looking at some of the, the three sort of top traded products, uh, the last couple of days here, which have been on the, who will take over the House or Congress as well as the race in Texas. And what you're seeing is at times where there's a change occurring and we saw like on September 14th, a dramatic change in the Democrats taking a stronger position to move forward with probably winning those races. And I think what's interesting about that was it was flat before. We're kind of holding it close to that fifty-fifty and now you're starting to see that evolve, and I think that's where it'll be powerful and interesting going into the, the true election here coming up, um, to see kind of what does change, especially when people come out of those exit polls and as we hear the last sort of round of, uh, politicians making their case to who should be elected.
FinTech TV Host: And of course there is something to the wisdom of the crowds. And speaking of catalysts, we are heading into the end of October, which is hard to believe. The weeks just seem to be passing by. But on the heels of the hotter PPI and CPI last week, there are a lot of expectations as we head into year end from the central banks. So monetary policy expectations for the Fed are something that markets are watching, not just in the US but also around the world. So how are retail traders actually using interest rate prediction markets as a hedging tool rather than just pure gambling?
JB McKenzie: Well, you know, you look at something like the September rate cut, um, that contract, uh, or should I say the September Fed decision, that, that contract was one of the largest traded contracts that whole entire week. That included sports and non-sports. The reason was because people had a vested interest, and I think what's happening is as these markets continue to evolve and the utility of being able to be very specific in their their risk on or risk off trade like with the Fed rate cut that that occurred, um, I'm sorry, it wasn't a cut, it actually was a raise, but I think what happened there was it let people actually trade and invest in it and, and that's something they haven't had access to before you really had to have a correlated asset. And I think with as they continue to develop, you're gonna see more and more investors wanna do that, have that ability to be able to take a market and do something such as something with the Fed or maybe uh with the ECB in Europe or even maybe Bank of England. And when you can bring those pieces together, it actually opens up a marketplace that just never existed before and we're really starting to see that evolution into financial contracts start to occur and I think we're just at the beginning of that journey.
FinTech TV Host: And of course, while I have you here on the ground in Money 2020, I do want to ask you about PERP futures. So for an audience accustomed to traditional assets, how will bringing PERP contracts onto a regulated brokerage actually change the derivatives landscape for investors?
JB McKenzie: The first time you've ever been able to trade a contract with no expiration, and I think what we've seen and heard from our customers is that's something that they demand. They don't necessarily want to always have to roll a contract, so sell out of one and buy into the next one, and I think the response we've gotten thus far as we've rolled out our crypto per product has been very, very strong. I think we expect it to continue to develop, and I think it's going to be an interesting asset class that will continue to evolve and develop because while it's starting off in the crypto side, it wouldn't surprise me if it starts moving into other areas such as energy or metals. Those have started to continue to build out there, but I think it's at the beginning of its journey, but clearly something of very interest for our clients.
FinTech TV Host: And of course over at Robinhood, you are equipping investors out there with so many different tools, but as we look toward 2027, what is your ultimate vision for how prediction markets become part of everyday portfolios?
JB McKenzie: Well, I think the first thing is going to be the development of the product in areas such as KPIs, which was announced over at uh at our Hood Summit a couple of weeks ago. And I think this gives investors a real opportunity to look at uh companies in a different way. So take something, let's say like Apple where there's earnings per share and revenues, that's one way you could trade the contract. But now you actually can develop to the next level and look at things such as revenues from their wearable or their subscription services or their non-US businesses. So it gives investors a broad range of opportunities across a variety of different contracts that I think is going to be really intriguing to our investors going forward. I think that's going to be the big innovation that we're going to start to see come out in the next year is going to be how those products can then live within the ecosystem that currently exists and giving traders choice. And I think choice is what makes great investors because they can make a decision they want to make and control their financial future.
FinTech TV Host: And of course, JB, before I let you go, we are heading into a new year, and we know that the retail landscape is changing. So what are you hearing on the ground here at Money 2020 in Vegas?
JB McKenzie: Well, a lot of it has been associated with eugenic trading, um, and I think we're continuing to see that, and we obviously, um, launched our eugenic trading, um, at Hood Summit as well, but we're seeing that continue to develop here in the very strong interest from both technology providers but also investors to be able to bring that into their portfolio. So I'm very excited to see how this continues to evolve and develop, and I'm glad to know that, you know, that Robinhood will be at the forefront of that.
FinTech TV Host: Well, JB, I appreciate your time. Thank you so much for joining me here at Money 2020 in Vegas.
JB McKenzie: Thanks for having me. My pleasure.
