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Gaming Edge’s TL;DR
- Robinhood said prediction market revenue surpassed $156 million in the second quarter.
- The company said it’s the first time revenue from prediction markets has topped revenue from stocks and crypto.
Robinhood expects $156 million in second-quarter revenue tied to prediction markets, a figure the company said surpasses its stock-trading and crypto revenue for the first time.
That projected total would represent 20% of Robinhood’s total trading revenue and make prediction markets its second-largest trading segment after options.
It is one of the clearest signs yet that event contracts are becoming a meaningful business line for a major US retail brokerage.
Prediction markets move from side business to core revenue line
Robinhood launched its first event contract at the end of 2024, tied to the US presidential election, then expanded into sports and other categories. Second-quarter activity was driven largely by the World Cup.
At the current pace, Robinhood’s prediction market revenue would annualize to more than $600 million.
Mizuho Securities analyst Dan Dolev said Robinhood users “simply love to gamble” and called prediction markets a substitute for cryptocurrency. As recently as the end of 2024, crypto was Robinhood’s largest trading-revenue source, underscoring how quickly the mix has shifted.
Robinhood is shifting execution away from Kalshi
Robinhood initially sent prediction market orders to Kalshi, with the two companies splitting a $0.02-per-contract fee evenly, according to the report. Robinhood now charges users up to $0.01 per contract, plus a variable fee based on the executing exchange. If an order is still sent to Kalshi, Kalshi adds another $0.01 per contract.
In June, Robinhood formed a joint venture with Susquehanna International Group to launch prediction market exchange Rothera. Robinhood has already begun routing some orders, including World Cup contracts, to Rothera in a move Dolev said gives the company “greater control over its prediction market business.”
Robinhood’s share of Kalshi’s trading volume fell from nearly 50% a year earlier to 17.5% in the second quarter, according to the report.
Regulation and competition remain key questions
Kalshi still dominates the wider market, with roughly $33 billion in nominal monthly trading volume in June, compared with $14 billion for Polymarket and $2.1 billion for Rothera.
Coinbase entered prediction markets this year and generated annualized revenue above $100 million in the second quarter.
Prediction markets remain under pressure from US regulators and state officials. Multiple states have sued prediction market platforms, alleging they function as unregistered gambling apps, while the Commodity Futures Trading Commission maintains that the products fall under its authority as financial derivatives.
What comes next for Robinhood may depend on two factors: whether sports-driven trading remains “exceptionally strong” into the next season, and how regulatory fights over prediction markets develop in the US.
Based on reporting by Moomoo Technologies, Inc.
