In the quarter ended 30 June 2026, Robinhood's customers traded 13.6 billion event contracts and the company booked $156 million of revenue from them. Six quarters earlier the same line was $3 million.
That is 11.9% of total net revenue, 20.1% of transaction revenue, and 1.56x the cryptocurrency line that carried the company's last cycle. It is the fastest thing Robinhood has ever built.
This piece is the long version: what an event contract is, where the idea came from, how Robinhood got here, who it is fighting, what the regulators are doing about it — and, at the end, what our own forward model does with the line. The short version of that last part is that our model has event-contract revenue peaking at $569 million a quarter in 2030 Q2 and declining after it, and that the peak is our assumption rather than a discovery.
What an event contract actually is
A binary event contract is a claim that pays $1 if something happens and $0 if it does not. It trades in cents in between. A contract at 63 cents is the market saying the thing is 63% likely, and it is also the price you pay to receive a dollar if you are right.
Three consequences follow, and they matter for everything below:
- The price is a probability. That is the whole intellectual appeal, and it is why economists have been interested in these markets since long before anyone could trade them on a phone.
- The notional is bounded. Every contract settles somewhere between $0 and $1, so a quarter with 13.6 billion contracts in it carries at most $13.6 billion of settlement value. That bound is arithmetic, not an estimate, and we use it later.
- It looks like an option and it is regulated like a future. Robinhood's users already trade options — binary, time-limited, expiring — so the product needed almost no explaining. The contracts are listed on federally designated contract markets and cleared through a registered futures commission merchant, which is the fact the entire regulatory fight turns on.
The idea is much older than the app
Prediction markets are not a 2024 invention. Nineteenth-century Wall Street ran organised betting on presidential elections, and those markets were often better calibrated than the newspapers. They faded, and the idea went quiet for most of a century.
The modern academic line starts in 1988 with the Iowa Electronic Markets, built by economists at the University of Iowa as a small-stakes research instrument. Its election contracts repeatedly beat contemporaneous polling, which is the finding the whole field has been trading on ever since.
Commercial attempts followed and mostly ended badly. Intrade was popular through the 2000s and was closed to US users by regulators. PredictIt survived on a narrow academic exemption and constant legal argument. The mid-2010s produced crypto-native experiments — Augur and its imitators — which proved the mechanism worked on-chain and that almost nobody wanted to use it there.
The current wave is two companies. Kalshi, founded 2018, took the slow and expensive route: it applied to the CFTC, was designated a contract market in 2020, and listed its first contracts in 2021. Polymarket, founded 2020, took the fast one: crypto-native, offshore, deep liquidity, enormous market selection. A 2024 court ruling cleared the path for election contracts in the US, the presidential race that November made the category briefly famous, and sports contracts turned that visibility into volume through 2025 and 2026.
How Robinhood got here
Robinhood did not invent any of it. It did something harder to copy: it put the product where 28.4 million funded customers already were.
- October 2024 — election event contracts, timed to the presidential race.
- March 2025 — a dedicated prediction-markets hub inside the app, opening with Fed-rate and college-basketball contracts sourced from Kalshi.
- Through 2025 — sports expansion: NFL, NCAA, player props, and later combination bets. This is where the volume came from.
- Late 2025 to early 2026 — a stake, with Susquehanna, in a CFTC-licensed exchange and clearing house, rebranded Rothera.
- June 2026 — Rothera live, opening on World Cup contracts. Robinhood now routes across its own venue, Kalshi, and IBKR's ForecastEx.
The strategic point of the last two steps is margin and control. Sourcing every contract from Kalshi meant sharing the economics and accepting somebody else's market selection. Owning a venue means keeping more of the fee and deciding what gets listed — including deciding what does not. Robinhood has declined to list some categories that invite manipulation.
The second chart above is the venue landscape as it stands.
How big is it, really
Big numbers deserve denominators, so here are four.
- Per customer. $156 million across 28.4 million funded customers is $5.49 a quarter, about $22 a year. The average Robinhood customer is not funding a habit; a small minority is.
- Per customer, in contracts. 13.6 billion contracts across 28.4 million customers is 479 contracts each per quarter — roughly 5.3 a day. That is a very different picture from the revenue one, and it is the tell: these are small, frequent, cheap positions.
- Revenue per contract. $156 million over 13.6 billion contracts is 1.15 cents. Against a maximum settlement value of $1, the implied take is at most 1.15%, and in practice lower, because contracts do not all settle at a dollar.
- Against the thing people compare it to. Americans wagered $166.94 billion with legal sportsbooks in 2025, a seventh consecutive record year since the Supreme Court struck down PASPA in 2018 — a figure press-reported from the state gaming regulators, not one we hold. Robinhood's 13.6 billion contracts carry at most $13.6 billion of settlement value, or $54.4 billion annualised. So even at the arithmetic ceiling, and even treating the two as the same market, Robinhood's event-contract book is at most a third the size of the legal sportsbook handle. The honest caveat is that the two are not the same market: handle and settlement value are different quantities, and equating them is the most common error in this debate.
The growth, though, is not in dispute. July 2026 ran 6.1 billion contracts — down 5% on June, which is the first flat month the line has had, but still roughly twenty times a year earlier and an 18.3 billion pace against the June quarter's 13.6 billion.
The competition
Robinhood is not the best prediction market. It is the most convenient one.
Kalshi remains the deepest standalone regulated US venue and still supplies a large share of what Robinhood lists — an awkward position for both of them. Polymarket has the broadest selection and the deepest liquidity globally, and has acquired its way to a US regulated path. On any given niche contract, both are better products: tighter spreads, more markets, better analytics.
Then there are the sportsbooks. FanDuel Predicts and DraftKings Predictions arrive with sports-betting user bases and a state-by-state rollout, and they understand the customer better than any broker does. Other brokers are circling too: Interactive Brokers has ForecastEx, Webull and Coinbase have entered, and Schwab has tested index event products.
The disruption risk is distribution, not product. A rumoured Meta effort — points-based first — would arrive with a user base an order of magnitude larger than Robinhood's, and permissionless on-chain venues have no take rate to defend at all.
Robinhood's answer is that it does not need to win any niche. It needs the customer who already has the app open, already has funded cash sitting in it, and would not otherwise open an account anywhere. Incremental customer acquisition cost for this product is close to zero, which is a structural advantage nothing on the list above can copy.
Broker or bookie
This is the part of the story that is genuinely contested, and it is worth stating both sides properly.
The case for having it in the app. No new account, no new funding rail, one portfolio view alongside stocks, options and crypto. High engagement, because news and live events happen constantly. Real revenue diversification — the line has already exceeded crypto in a quarter, which is not something a novelty does. And a user who trades options already understands a binary, time-limited, expiring instrument.
The case against. With player props, parlays and NFL volume, the "this is sports betting in a brokerage app" objection is not unfair — it is largely descriptive. Robinhood carries reputational baggage from the gamification criticism of the GameStop era, and critics argue the app now encourages impulsive speculation among exactly the young users who should be accumulating. State attorneys general have issued alerts. Class-action-style complaints exist. The product is unavailable in some states, and sports contracts specifically are restricted in others.
The counterweight the company points to is that the same app holds a retirement account with a 1–3% contribution match for Gold subscribers, banking features, and long-term investing tools. Gold subscribers reached 4.8 million in the June quarter, up 39% year over year. That is what makes the "broker or bookie" question hard rather than rhetorical: it is both, deliberately, and the bet is that customers can tell which is which.
On the evidence, they mostly can. The prediction that retail cannot distinguish between products has been made and falsified repeatedly — at commission-free equities, at the options boom, at crypto. It does not follow that no one is harmed; it follows that the aggregate behaviour looks like separate buckets rather than one confused one.
The regulation is binary, which is the actual risk
Every other risk in this business is a matter of degree. This one is not.
Event contracts are federally regulated derivatives, overseen by the CFTC, listed on designated contract markets. Several states argue that sports event contracts are unlicensed sports betting under state gambling law regardless of the federal wrapper. Lawsuits are live, a Ninth Circuit case is pending, and CFTC rulemaking is unresolved as of August 2026.
The reason this matters more than a growth-rate debate: an adverse outcome does not slow the line, it removes a large part of it, because sports is where the volume is. A model that captures this as a lower growth rate has not captured it at all. Ours does not attempt to — and we say so below rather than pretending otherwise.
What our model does with it
Our Robinhood forward model carries event contracts as a vertical of its own, projected the way Robinhood actually reports it: contracts traded times revenue per contract, because both are published monthly and therefore checkable against a press release instead of against a forecast.
The base case assumes 13.6 billion contracts in 2026 Q2 growing 10% a quarter — a sharp deceleration from twenty-fold, which is not a rate anything sustains — at 1.15 cents each, with the fee falling 2% a quarter as Kalshi, Polymarket and the sportsbooks compete it down. And it assumes a ceiling of 60 billion contracts a quarter.
That ceiling is the most important number in this piece and it is ours, not Robinhood's. Without one, 10% a quarter compounds to 91 billion contracts by 2031 and the line quietly becomes the company. A ceiling is an admission that nobody knows where a two-year-old product saturates.
The first chart above is what that produces. It is worth reading carefully, because the shape is not the one the growth story implies:
- Revenue rises from $156M to $569M a quarter by 2030 Q2.
- The ceiling binds in 2030 Q2 — quarter sixteen of twenty — and volume stops there.
- After that the fee per contract keeps sliding, so revenue declines: $565M, $561M, $558M, $554M. The line ends the horizon 2.6% below its own peak.
- Trailing annual revenue crosses $1 billion in 2028 Q2 and peaks at about $2.25 billion in 2031 Q1.
- The line's share of total revenue peaks at 18.8% and falls back to 15.7% by the end of the horizon.
So under our own assumptions, prediction markets become a large, durable, bounded contributor — and never the company. Whether that is right is exactly the open question. We would rather publish a cap we can defend than a compound we cannot.
The consequence for valuation is sharper than we expected, and it is the subject of a separate piece today: the whole vertical is worth $14.80 of our $94.42 base fair value, and doubling the assumed growth rate adds 52 cents, because the ceiling absorbs the upside.
What to watch
- August and September contract volume. July's 6.1 billion was the first sequential decline. Two more and the relevant assumption is not the ceiling, it is a stall.
- Revenue per contract. 1.15 cents is the number that decides whether volume converts to revenue. Robinhood publishes both monthly, so this is checkable without waiting for a quarter.
- The Ninth Circuit case and CFTC rulemaking. These are the binary risk. Nothing else in this business can take the line to zero.
- The sports share. Robinhood does not disclose a category split. Until it does, nobody outside the company can size the regulatory exposure precisely — including us.
- Rothera's share of routing. Owning the venue is worth margin, but the company has not quantified how much, and no filing breaks out volume by venue.
Sources and provenance. Reported figures for the quarter ended 30 June 2026 — event-contract revenue of $156M, 13.6 billion contracts, total net revenues of $1,308M, transaction revenue of $776M, cryptocurrency revenue of $100M, 28.4 million funded customers, 4.8 million Gold subscribers — are from Robinhood's second-quarter release and supplemental disclosure; the six quarters of event-contract revenue from $3M to $156M are as filed. July 2026's 6.1 billion contracts is from the company's monthly operating data. Derived by us: the 11.9% and 20.1% revenue shares, the 1.56x ratio to crypto, $5.49 and 479 contracts per funded customer, 1.15 cents per contract, and the $13.6 billion quarterly and $54.4 billion annualised bounds on settlement value, which follow from the fact that a binary contract cannot settle above $1. The $166.94 billion of 2025 US legal sportsbook handle and the seventh-consecutive-record framing are press-reported from state gaming regulators and are not a series this site stores; handle and settlement value are different quantities and the comparison is a bound, not an equivalence. The history of prediction markets, Robinhood's product timeline, the Rothera stake and launch, competitor positioning, state restrictions and the pending litigation are from public reporting and the company's own announcements, not from a filing. The 60-billion-contract ceiling, the 10% quarterly volume growth, the 2% quarterly fee decline and the resulting $569M peak, $1 billion trailing crossing and $2.25 billion trailing peak are assumptions in our own model and are labelled as ours throughout — they are estimates, not disclosures. Regulatory risk is priced nowhere in that model, by construction. Share price of $91.53 is as of 19 August 2026 and will differ from the live quote.
