Robinhood Prediction Markets Biz on Pace for $200 Million in Revenue
The decision by Robinhood Markets (NASDAQ: HOOD) to enter the football prediction industry is already benefiting the business and its investors.
Patrick Moley, an analyst at Piper Sandler, told clients in a recent report that Robinhood's prediction markets, which are provided through a collaboration with Kalshi, have processed $2.6 billion in volume so far this month, more than double the brokerage firm's previous monthly high. Based on September's run rate, Moley calculates that prediction markets may increase Robinhood's yearly revenue by up to $200 million.
"Prediction markets present significant upside opportunity for Robinhood,” said the analyst who reiterated an “overweight” rating and lifted his price target on the financial services stock to $140 from $120.
Since Robinhood doesn't reveal the monthly prediction market volume, associated analyst projections frequently rely on management hints and extrapolations. The trading company verified that over a billion yes/no contracts were exchanged on its platform during the second quarter. It is realistic to assume that number will increase exponentially in the current quarter, given that football is the sport that is wagered on the most in the United States. In August, Robinhood declared that it would offer NFL and college football players yes/no contracts this season.
For Kalshi, Robinhood is a huge business
Robinhood announced earlier this year that it was working with Kalshi on Super Bowl event contracts; however, this endeavor was abandoned after the Commodities Futures Trading Commission (CFTC) requested information. But the two sides persisted, and the strategy is succeeding.
Moley calculates that Robinhood contributed 27% of Kalshi's turnover in the second quarter based on the volume of event contracts the brokerage business handled. He also notes that on any given day, the brokerage firm's clients account for 25% to 35% of the prediction market operator's overall volume.
“Using Kalshi’s extrapolated volume for the third quarter of 2025 of 8,500 million contracts and assuming a 30% Robinhood share, the analyst models 2,550 million Robinhood contracts and $25.5 million in revenue, implying a quarterly run rate above $100 million and about $17.5 million for September,” reports Benzinga.
As per their agreement, Robinhood and Kalshi split the two cents per contract cost that traders pay equally. Moley predicts that Robinhood's prediction market volume would rise by 150% this quarter compared to the previous year.
Predictive markets are beneficial to Robinhood attorneys as well
Like its partner Kalshi, Robinhood is facing legal challenges in several states, including Massachusetts, Nevada, and New Jersey, as a result of its foray into prediction markets. After the state sued Kalshi, Robinhood filed a lawsuit against the Massachusetts attorney general and the state's gaming regulator last week, arguing that state gaming regulations take precedence over the Commodities Exchange Act (CEA).
In a lawsuit against Kalshi filed by a number of Californian tribal gambling organizations, Robinhood has also been named as a co-defendant. According to those organizations, Kalshi and intermediaries like Robinhood are in violation of the Indian Gaming Regulatory Act (IGRA). Before any of the prediction markets lawsuits are settled, a long time may pass.
“A swift and conclusive resolution of this ongoing litigation is unlikely. The financial stakes are high on both sides. Given the continuing litigation, it may be necessary for Congress to clarify CEA language and its intent for U.S. gaming and financial markets,” according to Snell & Wilmer.