- Robinhood likely generated $20 million in Q3 prediction markets revenue
- That’s double the prior quarter’s tally
- Analyst says that with the help of football contracts, that figure could surge to $50 million in Q4
Helped by the start of football season, Robinhood Markets (NASDAQ: HOOD) is likely to have posted $20 million in third-quarter prediction market revenue, or more than double the prior quarter’s tally, and that figure could more than double in the current quarter, according to an analyst covering the financial services firm.
In a Monday report to clients, Compass Point analyst Ed Engel said Robinhood probably generated $20 million in prediction market revenue during the July through September period, a more than 100% increase from the June quarter. As bettors know, the third quarter includes just one full month of football — the most wagered-on sport in the US.
A full quarter of benefits from college football and the NFL could propel Robinhood’s prediction market top line to $50 million, according to the Compass Point analyst, implying a more than fivefold increase from the second quarter.
We model HOOD’s 4Q prediction reaching ~$50m alongside a full quarter of NFL season,” observes Engel. “We don’t believe the Street is accurately forecasting HOOD’s 2H25 or 2026 crypto revenue, which includes higher fee rates and staking revenue.”
In August, California-based Robinhood announced its Robinhood Derivatives, LLC (RHD) unit would offer NFL and college football event contracts. Compass Point rates the stock a “buy” with a $161 price target, implying significant upside from current levels.
Robinhood Prediction Market Growth Could Be a Warning
In the prediction market space, Robinhood partners with Kalshi, among others, and by some estimates, the brokerage firm accounts for 25% to 35% of Kalshi’s turnover on any given day.
That partnership may be among the reasons why investors have pushed Kalshi’s valuation to $5 billion, with recent rumors suggesting the privately held company’s next financing round could see it take in capital at a $10 billion to $12 billion valuation.
Though not publicly acknowledged by the Silicon Valley or greater venture investing community, investing in Kalshi at those rich price points is arguably risky because Robinhood is sharing the economics — a per contract fee of a penny, according to Engel — of its prediction market exposure with Kalshi. With its event contracts revenue surging, the trading platform may be incentivized to eventually go it alone in the prediction market space.
To be sure, the company hasn’t said that’s in the near-term cards, but it hasn’t shied away from the possibility of making a prediction market acquisition or building an in-house offering — possibilities the venture investing community appears to be ignoring when valuing Kalshi.
Robinhood Expanding Event Contracts Menu
Last week, Robinhood announced the addition of more than 100 event contracts, including sports derivatives, to its prediction market menu. Some of those contracts, including those related to the NBA and World Series, are already live, while others will be added in the coming weeks and months.
That expansion builds on Robinhood’s established prediction market partnerships, indicating that, for now at least, the company will maintain its relationship with Kalshi.
“Event contacts are offered by Robinhood Derivatives through either Kalshi or ForecastEx. When determining the exchange we work with, we look at a number of factors to determine the best fit for customers, including liquidity and the types of contracts offered,” a representative told Casino.org.
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