As financial platforms race to add prediction markets, they do so at the cost of accelerated casino-like user churn, according to founder and CEO of venture capital firm Inversion Capital, Santiago Roel Santos.

Santos argued on the blog post on Saturday that while he is a “believer in the basic idea” of prediction markets, he believes that offering them on mainstream financial apps like Robinhood threatens future value capture by increasing the risk of user accounts being liquidated.

“The problem with casino-style products isn’t that users lose money. It’s that casinos accelerate customer churn,” he said.

“The longer you exist in the casino, the greater the likelihood of liquidation. And liquidation means complete exclusion from the game. A rejected user is worth zero.”

In 2025, Robinhood has begun to increasingly focus on prediction markets, and cryptocurrency companies Coinbase and Gemini will also soon offer similar products that will allow users to bet on events such as sports and politics.

Santos stated that such offerings place too much emphasis on an area that will ultimately impact the application’s core operate case; offering easy-to-use financial services to retail customers.

“Products like Robinhood are initially successful because they are simpler, more accessible and more digitally native than legacy products,” he said.

“But users are aging. Over time, the real opportunity is to grow with them and take over more of their financial lives, not to maximize mining at the peak of speculation,” he added. “If durability matters, you optimize for staying power.”

Blockchain-based prediction markets have gained popularity following the 2024 US elections, with Robinhood initially gaining traction in March thanks to its partnership with Kalshi.

Related: DraftKings is eyeing cryptocurrency offerings as it expands into prediction markets

Cryptocurrency exchange Coinbase announced on Wednesday that it is adding prediction markets as part of an “everything in the app” campaign in partnership with Kalshi, while affiliate Gemini has won a U.S. license to offer event contracts.

Ultimately, Santos believes that while prediction markets will look good on the balance sheet in the compact term, they will look much more volatile for financial applications later because they will introduce a significant amount of risk that could destabilize users.

“Financial super apps that treat quitting as a high-end risk will result in stronger safeguards and better long-term outcomes,” he argued, adding:

“If it were me, I would prioritize products that users naturally want as they mature financially: credit cards, insurance, savings funds. They’re boring. The data suggests that’s why they work. They’re tied to the core relationship of household liquidity management.”

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