Robinhood (HOOD.US) is expanding its sports betting offerings with new features, such as preset combination contracts for professional football games. In a statement released on Tuesday, the company announced that users can now trade on game outcomes, total scores, and point spreads for individual matches. So far, over 1 million users have traded approximately 11 billion contracts. By early next year, customers will be able to customize combinations with up to 10 outcomes. These combination contracts mimic the parlay bets offered by traditional sportsbooks, which are popular among gamblers due to their high payout potential but low win probability—making them highly profitable for operators.
Adam Hickson, Senior Director of Robinhood Futures and Prediction Markets, stated in an interview: "Our ultimate plan is to further develop and enable custom combinations across all categories in the prediction market space." In addition to combination contracts, Robinhood has introduced individual player contracts for tracking statistics like passing, receiving, and rushing yards in professional football. The company noted that these player contracts will later extend to other sports.
These "player prop bets" have recently been at the center of sports betting scandals, with U.S. prosecutors accusing professional athletes of leaking insider information to gamblers. Given the lack of regulation, authorities and sports leagues are racing to address the novel legal challenges posed by prediction markets.
Hickson emphasized that prediction markets have been one of Robinhood’s most successful product launches. "The clear demand we hear from our user base is for more information. This is an extremely fast-paced industry," he said. Robinhood now leads the sports prediction market alongside competitors like Kalshi, Polymarket, and Crypto.com. The company gained an edge after partnering with Susquehanna International Group to acquire a majority stake in LedgerX, a U.S.-based derivatives exchange previously owned by FTX and now operated by Miami International Holdings.
**Disrupting Traditional Betting** Robinhood’s stock has surged over 200% this year, pushing its market cap above $100 billion. Recently added to the S&P 500, the company reported a Q3 profit of $556 million, up 271% year-over-year. Its prediction market segment has grown rapidly, with 9 billion contracts traded by over 1 million users since its launch a year ago. Combined with its acquisition of Luxembourg-based crypto exchange Bitstamp in June, Robinhood’s prediction market business has surpassed $100 million in annualized revenue in under a year.
Analysts, including those at Bank of America, warn that tech giants like Robinhood could fundamentally reshape customer acquisition costs and fee structures in the betting industry. BofA noted that Robinhood’s recent joint venture with Susquehanna Investment Group may reduce its reliance on Kalshi.
"Online sports betting investors seem to view any negative news for Kalshi as a positive for operators, but we believe increased investment from large tech firms like Robinhood poses a competitive threat to DraftKings (DKNG.US) and FanDuel," cautioned BofA analyst Julie Hoover. Another key focus is the fee competition among Robinhood, Kalshi, and Polymarket for event contracts—as they vie for user attention against established sportsbooks like FanDuel, DraftKings, and BetMGM, which offer high-profile bonus bets, profit boosts, and promotions.
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