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Robinhood's Prediction Markets Move Beyond Sports: Why It Matters
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Key Takeaways
Robinhood's crypto-linked contracts are taking a disproportionate share of prediction-market activity.
Event-contract revenue jumped more than tenfold to $156 million in Q2 as trading hit 13.6 billion contracts.
Rothera generated $17 million of Q2 event-contract revenue as Robinhood broadened its routing ecosystem.
Robinhood Markets’ (HOOD - Free Report) prediction market business has emerged as one of its most important growth engines. But its rapid expansion has also brought increasing regulatory attention, particularly around sports-related contracts.
Recent comments from CEO Vlad Tenev suggest the next phase of growth could look different. Crypto-linked event contracts are already taking a “disproportionate share” of activity, according to Tenev, who expects sports to eventually represent a minority of prediction-market activity.
For investors, that mix shift matters. If crypto and other non-sports contracts gain traction without slowing overall growth, Robinhood could broaden the opportunity while reducing its dependence on the segment facing the most state-level scrutiny.
Why the Shift Beyond Sports Matters for Robinhood
Sports contracts remain at the center of Robinhood’s regulatory challenges. Missouri recently ordered Robinhood and other operators to stop offering sports event contracts without a state sports-wagering license. Meanwhile, HOOD is appealing litigation in Michigan, while the Ninth Circuit in August affirmed the denial of preliminary relief in its Nevada case. The company has since petitioned the U.S. Supreme Court.
Against this backdrop, a shift toward crypto, economic and other non-sports event contracts could become strategically important. Diversification would not eliminate regulatory risk, but it could reduce Robinhood’s dependence on sports – the category currently attracting the greatest state-level scrutiny – and make prediction market growth more resilient if restrictions on sports contracts broaden.
Prediction Markets are Becoming Financially Material at HOOD
The issue is increasingly important because prediction markets are no longer a peripheral experiment for Robinhood. Management previously described prediction markets as the company’s fastest-growing product line by revenue.
Event-contract revenues surged more than tenfold year over year to $156 million in the second quarter of 2026, while contracts traded jumped more than tenfold to a record 13.6 billion.
Prediction markets also fit Robinhood’s broader strategy of increasing customer engagement beyond traditional stock and options trading. Event contracts tied to crypto prices, economic indicators, or other outcomes can give customers more reasons to return to the platform and deepen engagement across Robinhood’s ecosystem.
That matters for a business increasingly focused on expanding revenue per customer and reducing reliance on any single trading category.
Competition is Building for HOOD as IBKR & Coinbase Expand
Robinhood is not pursuing this opportunity alone. Interactive Brokers (IBKR - Free Report) has expanded its prediction market offering by creating a unified interface spanning Kalshi, CME Group and its ForecastEx platform, allowing customers to compare liquidity and trade contracts alongside stocks, options, futures, crypto and other assets.
Coinbase Global (COIN - Free Report) is also building prediction markets into its broader “Everything Exchange” strategy. Its offering launched with Kalshi-sourced contracts and now spans categories, including crypto, economics, sports and companies. Coinbase’s prediction market contracts and revenues increased 106% sequentially in the second quarter.
The expansion by Interactive Brokers and Coinbase validates growing broker interest in event contracts, but it also raises the competitive stakes for Robinhood. Product breadth, liquidity, pricing and user experience could increasingly determine which platforms capture engagement.
Rothera Gives HOOD More Infrastructure Flexibility
Robinhood is simultaneously strengthening its infrastructure. In June, it began routing event contracts to Rothera, a CFTC-licensed exchange and clearinghouse independently managed through Robinhood’s joint venture with Susquehanna International Group. Rothera accounted for $17 million of Robinhood’s second-quarter event-contract revenues.
The infrastructure investment could provide greater flexibility to expand contract availability and respond to evolving customer demand. Robinhood has also added other routing relationships, including Crypto.com’s prediction-market infrastructure, suggesting it is building a broader ecosystem rather than depending on a single venue.
What Should HOOD Investors Watch?
The key investor trigger is whether non-sports contracts can gain share while overall prediction market revenues and engagement remain strong. That combination would indicate Robinhood can diversify one of its fastest-growing businesses without sacrificing momentum, while potentially lowering its dependence on the category attracting the greatest regulatory pressure.
Sustained growth in prediction market revenues could make the business an increasingly meaningful contributor to Robinhood’s overall earnings, adding another revenue stream alongside equities, options and crypto trading. Competition from Interactive Brokers and Coinbase, regulatory uncertainty and the risk of moderating growth remain key concerns.
Still, continued volume growth, broader contract diversification and rising revenue contribution will likely strengthen the case for prediction markets becoming a durable driver of Robinhood’s earnings growth.
Over the past six months, Robinhood’s shares have soared 79.8%, substantially outperforming the industry’s rally of 19.3%.
View the Zacks #1 Rank List
Image: Bigstock
Robinhood's Prediction Markets Move Beyond Sports: Why It Matters
Key Takeaways
Robinhood Markets’ (HOOD - Free Report) prediction market business has emerged as one of its most important growth engines. But its rapid expansion has also brought increasing regulatory attention, particularly around sports-related contracts.
Recent comments from CEO Vlad Tenev suggest the next phase of growth could look different. Crypto-linked event contracts are already taking a “disproportionate share” of activity, according to Tenev, who expects sports to eventually represent a minority of prediction-market activity.
For investors, that mix shift matters. If crypto and other non-sports contracts gain traction without slowing overall growth, Robinhood could broaden the opportunity while reducing its dependence on the segment facing the most state-level scrutiny.
Why the Shift Beyond Sports Matters for Robinhood
Sports contracts remain at the center of Robinhood’s regulatory challenges. Missouri recently ordered Robinhood and other operators to stop offering sports event contracts without a state sports-wagering license. Meanwhile, HOOD is appealing litigation in Michigan, while the Ninth Circuit in August affirmed the denial of preliminary relief in its Nevada case. The company has since petitioned the U.S. Supreme Court.
Against this backdrop, a shift toward crypto, economic and other non-sports event contracts could become strategically important. Diversification would not eliminate regulatory risk, but it could reduce Robinhood’s dependence on sports – the category currently attracting the greatest state-level scrutiny – and make prediction market growth more resilient if restrictions on sports contracts broaden.
Prediction Markets are Becoming Financially Material at HOOD
The issue is increasingly important because prediction markets are no longer a peripheral experiment for Robinhood. Management previously described prediction markets as the company’s fastest-growing product line by revenue.
Event-contract revenues surged more than tenfold year over year to $156 million in the second quarter of 2026, while contracts traded jumped more than tenfold to a record 13.6 billion.
Prediction markets also fit Robinhood’s broader strategy of increasing customer engagement beyond traditional stock and options trading. Event contracts tied to crypto prices, economic indicators, or other outcomes can give customers more reasons to return to the platform and deepen engagement across Robinhood’s ecosystem.
That matters for a business increasingly focused on expanding revenue per customer and reducing reliance on any single trading category.
Competition is Building for HOOD as IBKR & Coinbase Expand
Robinhood is not pursuing this opportunity alone. Interactive Brokers (IBKR - Free Report) has expanded its prediction market offering by creating a unified interface spanning Kalshi, CME Group and its ForecastEx platform, allowing customers to compare liquidity and trade contracts alongside stocks, options, futures, crypto and other assets.
Coinbase Global (COIN - Free Report) is also building prediction markets into its broader “Everything Exchange” strategy. Its offering launched with Kalshi-sourced contracts and now spans categories, including crypto, economics, sports and companies. Coinbase’s prediction market contracts and revenues increased 106% sequentially in the second quarter.
The expansion by Interactive Brokers and Coinbase validates growing broker interest in event contracts, but it also raises the competitive stakes for Robinhood. Product breadth, liquidity, pricing and user experience could increasingly determine which platforms capture engagement.
Rothera Gives HOOD More Infrastructure Flexibility
Robinhood is simultaneously strengthening its infrastructure. In June, it began routing event contracts to Rothera, a CFTC-licensed exchange and clearinghouse independently managed through Robinhood’s joint venture with Susquehanna International Group. Rothera accounted for $17 million of Robinhood’s second-quarter event-contract revenues.
The infrastructure investment could provide greater flexibility to expand contract availability and respond to evolving customer demand. Robinhood has also added other routing relationships, including Crypto.com’s prediction-market infrastructure, suggesting it is building a broader ecosystem rather than depending on a single venue.
What Should HOOD Investors Watch?
The key investor trigger is whether non-sports contracts can gain share while overall prediction market revenues and engagement remain strong. That combination would indicate Robinhood can diversify one of its fastest-growing businesses without sacrificing momentum, while potentially lowering its dependence on the category attracting the greatest regulatory pressure.
Sustained growth in prediction market revenues could make the business an increasingly meaningful contributor to Robinhood’s overall earnings, adding another revenue stream alongside equities, options and crypto trading. Competition from Interactive Brokers and Coinbase, regulatory uncertainty and the risk of moderating growth remain key concerns.
Still, continued volume growth, broader contract diversification and rising revenue contribution will likely strengthen the case for prediction markets becoming a durable driver of Robinhood’s earnings growth.
Over the past six months, Robinhood’s shares have soared 79.8%, substantially outperforming the industry’s rally of 19.3%.
Image Source: Zacks Investment Research
HOOD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.