Robinhood says Q2 prediction markets revenue rose 10x+ YoY to $156M, topping stock and crypto for the first time, as speculators shift to real-world event bets
Brokerage app Robinhood has quickly become a force in prediction markets, challenging the hold of Kalshi and Polymarket on the popular betting market.
Context & Ripple Effects
Robinhood entered the category through its Kalshi partnership and prediction-markets hub, initially offering contracts tied to the federal funds rate and March Madness. The latest results show that event contracts have moved from a product addition to a material transaction-revenue line.
The shift is especially notable against Robinhood’s recent mix: its crypto-led revenue surge in late 2024 has given way to Q2 event-contract revenue of $156M while crypto revenue declined year over year. That puts Robinhood more directly in competition with Kalshi and Polymarket for retail prediction-market activity.
First-order effects
- Robinhood’s event-contract business now outranks its stock and crypto transaction revenue for the first time, making prediction markets a central near-term driver of its trading mix.
- Kalshi and Polymarket face a larger retail-distribution competitor as Robinhood turns the market access created by its Kalshi relationship into meaningful revenue.
Second-order effects
- Competition for liquidity, contract selection and retail attention is likely to intensify: rival platforms will need to defend participation as Robinhood’s existing brokerage audience encounters event contracts alongside other trading products.
- Robinhood has a clearer incentive to prioritize event contracts in product placement and customer engagement, particularly while its Q2 results showed crypto revenue falling to $100M even as event-contract revenue climbed.
Third-order effects
- If event-contract demand remains durable, brokerages may increasingly treat prediction markets as a core transaction category rather than a niche betting feature, strengthening the logic of prediction-market platformization.
- The market’s competitive center could shift toward platforms that combine retail distribution with deep liquidity; whether that favors partnerships or independent venues will depend on each platform’s ability to retain active traders.
The trend: Prediction markets are becoming a mainstream retail-brokerage product, with distribution and liquidity increasingly determining which platforms capture the category’s revenue.