- Santiago Roel Santos warns that prediction markets in finance apps increase user churn by promoting risky behavior.
- Prediction markets allow users to bet on events like sports and politics within financial platforms.
- Robinhood, Coinbase, and Gemini are expanding into offering these products in 2025.
- High churn rates from such casino-like products could undermine long-term user retention and financial app stability.
- Santos recommends focusing on products that support users’ financial maturity, such as credit cards and savings tools.
Santiago Roel Santos, founder and CEO of Inversion Capital, cautions that the rise of prediction markets in finance apps may lead to increased user churn. In a recent blog post, Santos explained that while he supports the concept of prediction markets, offering them on mainstream platforms like Robinhood risks account liquidations and reduced long-term value. These markets allow users to wager on events such as sports and political outcomes.
Santos highlighted that the main issue is not users losing money, but that casino-like products accelerate churn. “The longer you exist inside a casino, the higher the probability of liquidation. And liquidation means you’re out of the game entirely. A churned user is worth zero,” he stated. Robinhood has increased its focus on prediction markets throughout 2025, following a partnership with Kalshi in March. Similarly, crypto exchanges Coinbase and Gemini are introducing prediction markets. Coinbase announced its collaboration with Kalshi as part of its “everything app” strategy, while a subsidiary of Gemini secured a U.S. license to offer event contracts.
Santos argued that these offerings could distract from the main purpose of finance apps: providing accessible financial services to retail clients. He noted that such platforms initially succeed by being simple and digital-native but need to evolve to retain users. “If durability matters, you optimize for staying power,” he said. Santos recommends prioritizing products that users adopt as they grow financially, such as credit cards, insurance, and savings vehicles, which align with managing household liquidity.
Blockchain-based prediction markets saw growth during the 2024 U.S. elections, boosting interest in event-based betting products. Santos believes that while prediction markets may contribute positively to revenue short-term, the resulting instability from increased user churn poses risks to long-term platform health.
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