Robinhood’s Prediction Market Business Hits $200 Million Milestone
Robinhood has rapidly become a major force in the prediction markets sector, with its focus on sports and event-based contracts driving significant revenue growth. According to a recent analysis by Piper Sandler, Robinhood’s prediction markets for the NFL and other events are now generating approximately $200 million in annual revenue. This figure highlights the growing financial impact and the expanding market size of prediction markets within the sports and event betting sectors on Robinhood’s platform.
The company’s expansion into prediction markets is not limited to sports. Robinhood has also introduced event contracts tied to economic indicators, such as Federal Reserve interest rate decisions. These contracts have seen strong investor interest, with nearly 40 million contracts traded following a recent Fed rate cut announcement. This surge in activity demonstrates the importance that investors place on economic events and their willingness to use prediction markets to manage portfolio risk.
Robinhood Bets Big on 24/7 Prediction Market Access
In August, Robinhood Markets expanded its prediction market offerings to include event contracts on both college and professional sports. JB Mackenzie, the company’s Vice President and General Manager of Futures and International, described the current phase as the beginning of a “revolution” in how prediction markets operate. The company is working to make prediction markets more accessible around the clock, leveraging tokenization technology to enhance user experience and engagement.
The integration of sports betting into Robinhood’s platform is seen as a way to formalize consumer engagement, connecting traditional stock market users with sports fans who want to participate in prediction markets during games. This move is part of a broader strategy to broaden Robinhood’s offerings across economic events, sports, politics, and digital assets. The company’s diversification beyond traditional stock trading has attracted positive analyst attention, with firms like Piper Sandler issuing bullish price targets based on the growth potential of Robinhood’s expanded platform.
Market Capitalization Soars as Robinhood Partners with Kalshi
Robinhood Markets Inc. is projected to add $16 billion in market capitalization as it expands its services into prediction markets. The company has partnered with Kalshi, a leading prediction market platform, enabling users to bet on events such as elections directly through Robinhood’s mobile app. This integration has led to increased trading volumes across the platform, with contract volumes on platforms like Kalshi expected to reach a record $2.6 billion by September 2025.
The surge in trading is driven by growing user interest in event-based betting, especially around high-profile events like U.S. elections. Robinhood’s market cap has surged from approximately $20 billion in early 2024 to over $80 billion by mid-2025, marking a strong recovery from post-IPO lows experienced in 2022. The company’s expansion into new areas, including crypto trading and prediction markets, is seen as a key driver of this growth.
PrizePicks Enters Prediction Markets with NFA Approval and Major Stake Sale
PrizePicks, an Atlanta-based fantasy sports company, has made headlines with its recent entry into the regulated prediction markets space. The company sold a majority stake to European lottery and gaming giant Allwyn for $1.6 billion, valuing PrizePicks at $2.5 billion initially. Allwyn now holds a 62.3% stake and has the option to invest further, potentially raising the valuation to $4.15 billion if performance targets are met over the next three years.
Following the sale, PrizePicks’ subsidiary, Performance Predictions II LLC, received regulatory approval from the National Futures Association (NFA) to register as a Futures Commission Merchant (FCM). This approval allows PrizePicks to accept orders from members to buy and sell futures contracts on designated contract markets regulated by the Commodity Futures Trading Commission (CFTC). PrizePicks is now the first sports entertainment platform among major gaming companies to receive this NFA approval, positioning it at the forefront of integrating daily fantasy sports with regulated prediction markets under federal oversight.
CEO Mike Ybarra emphasized that there will be no organizational changes or layoffs as a result of the acquisition, and the company plans to continue growing under Allwyn’s ownership. Ybarra described this as an exciting new chapter aimed at accelerating innovation and enhancing interactive, engaging, and rewarding fan-first entertainment experiences.
Kalshi Overtakes Polymarket as Leading Regulated Prediction Market Platform
The competition between Kalshi and Polymarket has intensified in recent months, with Kalshi now capturing nearly 60% of total market volume as a regulated platform. According to Dune Analytics data, Kalshi processed over $500 million in weekly trading volume, while Polymarket generated $430 million during the same period. Analysts attribute Kalshi’s lead to faster turnover and more frequent trading, compared to Polymarket’s longer-term markets that lock in funds for weeks or months.
The two platforms operate under different regulatory environments and market structures. Kalshi is authorized by the CFTC and serves U.S. users, while Polymarket historically served international users via blockchain technology. Polymarket is now pushing back into the U.S. market by acquiring QCX, a regulated derivatives exchange clearinghouse, aiming to resolve prior regulatory gray areas and compete directly with Kalshi’s regulatory advantage.
Both platforms have experienced substantial growth in user activity and trading volumes throughout 2025, especially around political events and corporate earnings. Kalshi’s event contracts have seen high demand because they offer direct exposure to events impacting businesses, people, and the economy, providing accurate signals on future event likelihoods.
Regulatory Developments and Legal Challenges Shape the Industry
The rapid growth of prediction markets has brought increased regulatory scrutiny and legal challenges. PrizePicks faces regulatory scrutiny in several states, including Arizona, Iowa, Hawaii, and California, where daily fantasy sports products are challenged legally. Notably, California’s Attorney General issued an opinion declaring daily fantasy sports illegal under state law. Despite these challenges, PrizePicks maintains that its operations comply with applicable laws and does not operate where activities are deemed illegal.
Meanwhile, Kalshi faces lawsuits and controversies in several U.S. states related to gambling allegations, intensified by poker legend Daniel Negreanu becoming the platform’s public face. Polymarket is also navigating regulatory hurdles as it seeks to regain ground in the lucrative U.S. prediction market space.
The regulatory landscape is evolving, with the CFTC and NFA playing key roles in overseeing the industry. Acting CFTC Chairman Caroline Pham has been credited with promoting innovation while maintaining robust regulatory standards. The approval of PrizePicks’ subsidiary as a Futures Commission Merchant is seen as a milestone for the industry, enabling new partnerships and product offerings.
Prediction Markets Gain Mainstream Attention During High-Profile Events
Prediction markets have become popular tools for gauging public and trader sentiment on potential political developments and high-profile events. For example, betting markets are actively speculating on whether Tesla CEO Elon Musk will join the Trump administration by the end of 2025. According to Kalshi data, traders assign about an 8% probability to this outcome, while Polymarket bettors estimate the odds at around 7%. These percentages reflect current trader sentiment rather than definitive forecasts.
Events such as elections and sports serve as accelerants for prediction market activity because they generate strong public opinions that users want to share and act upon. The evolving dynamics between Musk and the Trump administration could have significant implications for both technology industry trends and government policies, making them a focal point for prediction market participants.
Industry Outlook: Growth, Innovation, and Strategic Partnerships
The prediction markets industry is experiencing rapid growth, driven by innovation, regulatory milestones, and strategic partnerships. Robinhood’s partnership with Kalshi and its expansion into 24/7 prediction market access have set new standards for user engagement and platform capabilities. PrizePicks’ entry into the regulated prediction markets space, backed by Allwyn’s investment and NFA approval, positions the company as a leader in integrating daily fantasy sports with federally regulated prediction markets.
The competition between Kalshi and Polymarket continues to shape the market, with both platforms pursuing growth through acquisitions, partnerships, and new product offerings. Regulatory developments and legal challenges will remain key factors influencing the industry’s trajectory, as companies navigate complex state and federal frameworks.
As prediction markets gain mainstream attention and user participation surges, industry observers expect continued innovation and expansion. The integration of sports, politics, economics, and digital assets into prediction market platforms is transforming how users engage with real-world events, making prediction markets a dynamic and influential segment of the broader gaming and financial services landscape.
