Robinhood knows you want to bet on everything 

Robinhood is betting that its customers want to trade on absolutely everything. 

On Tuesday, the popular stock-trading app unveiled a slate of updates to its prediction markets business, aggressively expanding into sports. Now, Robinhood users can trade contracts tied to specific professional football players’ performances, as well as pre-packaged combos for individual games. 

Early next year, customers will be able to combine up to ten outcomes — such as winners, spreads, and totals — into a single, custom-built contract. Robinhood’s news site, Sherwood, is also launching a new sports newsletter, Scoreboard. Eventually, Robinhood plans to launch contracts that span not just multiple games, but multiple categories, from sports to climate to politics. “If customers say they’re looking to trade a specific category or specific event, we’re all ears,” Adam Hickerson, Robinhood’s senior director of futures and prediction markets, tells Fast Company.

Robinhood’s entrance into prediction markets can be seen as a natural culmination of the trajectory it set into motion years ago. For the uninitiated, prediction markets allow people to trade on real-world events by buying and selling contracts. These events can range from sports matches to political elections to who Time will name as its “Person of the Year.” 

Since Robinhood launched prediction markets in late 2024, they’ve become the company’s fastest growing line of business: In the third quarter of 2025, it reported that users traded 2.3 billion prediction-markets contracts. Then, in October alone, that figure reached 2.5 billion. 

The most popular contracts have been in sports. Robinhood maintains that users are not gambling, as trading on the market sets the odds, not the platform itself. Still, the sports contracts tap into an enthusiasm for sports speculation. According to Pew, 22% of adults in the US have bet money on sports in the past year. Among men under 30, that figure rises to 36%. Robinhood isn’t the only app getting in the game: Fanatics, a global sports platform, just launched a predictions-market app, becoming the first sportsbook to do so.

Some regulators believe decision markets cross the line into gambling. Numerous states have sent Robinhood cease-and-desist letters, demanding prediction markets stop offering sports contracts. In response, Robinhood sued New Jersey and Nevada earlier this year, maintaining that its markets are completely legal. 

There is no sign of regulatory turmoil dampening Robinhood’s ambition. In November, the company announced plans to start its own prediction market, launching an exchange with Susquehanna International Group. “This is just the tip of the iceberg,” Hickerson says. 

From meme stocks to prediction markets   

In 2013, Vlad Tenev and Baiju Bhatt founded Robinhood as an easy, commission-free way for users to trade on their phones. Business boomed during the COVID-19 pandemic as bored Americans, flush with stimulus checks, flocked to the app. The online brokerage became known for its popularity among young adrenaline junkies who treated investing less like retirement planning and more like a mobile game. 

Robinhood’s supporters applauded the company for democratizing finance. Critics, meanwhile, slammed it for encouraging users to trade stocks like gamblers betting on sports. In 2021, legendary investor Charlie Munger told CNBC that Robinhood was “a gambling parlor masquerading as a respectable business,” calling it a “sleazy, disreputable operation.” 

The anti-Robinhood backlash boiled over during the GameStock saga, when users fueled a trading frenzy that drove meme stocks to absurd highs. In the aftermath, Robinhood dialed back on its so-called gamified elements, removing a confetti animation that accompanied certain achievements. In a February 2021 hearing before Congress, Tenev testified that the “vast majority” of Robinhood’s customers were long-term investors, not day traders buying meme stocks. 

Eventually, however, Robinhood acknowledged the importance of its active day traders — users less interested in traditional stocks and far more interested in riskier products like cryptocurrencies. “These are our most engaged customers that generate the lion’s share of our revenue,” Tenev told the Wall Street Journal in November. “We put our best people on active traders.”

Robinhood keeps these valuable customers happy by letting them invest in whatever their hearts desire. Increasingly, that means prediction markets. 

Betting on predictions

Prediction markets have been around for more than a century. They have primarily existed as a niche curiosity, not a major focus for investors, amateur or professional. Then came last year’s election. 

More than $3.3 billion was traded in 2024 presidential election contracts, mostly on prediction market Polymarket. Robinhood launched its own contracts a month before the election, its first foray into the prediction markets. By the time Trump won — as forecast by the markets — the concept of prediction markets had cemented itself in the American mainstream. 

At the time, it was not legal for Americans to use Polymarket. As a result, it operated offshore, although Americans likely still used it via VPNs and thanks to Polymarket’s reliance on cryptocurrency. Reports alleged that much of the election-trading volume came from “wash trading,” which inflates market activity and is a form of market manipulation.   

In January, Kalshi launched “100% legal” sports trading in all 50 states, regulated by the Commodity Futures Trading Commission. The next month, Robinhood announced a partnership with Kalshi for Super Bowl contracts. But mere hours after the announcement, Robinhood cancelled the contracts, at the request of the CFTC. The agency had “serious concerns” that the contracts “may not be permissible under the law,” CFTC a representative said at the time. 

Robinhood was undeterred. In March, just ahead of the NCAA basketball tournament, the company launched its prediction markets hub, still in partnership with Kalshi. A CFTC official told Sportico that the agency had “no legal justification to prevent Robinhood from offering access to these contracts.”

Robinhood is competing not only with Polymarket and Kalshi, but also Coinbase, which is reportedly planning to introduce prediction markets thanks to its own partnership with Kalshi.

Defining ‘gambling’

Laws on gambling — and how regulators interpret those laws — are set to be one of Robinhood’s biggest obstacles when it comes to decision markets. 

Kalshi and Robinhood maintain that their users are trading, not gambling. Kalshi and Robinhood do not make money based on outcomes, but instead earn revenue via transaction fees. They emphasize that, unlike sportsbooks, prediction markets do not take bets or set odds. 

For example, if the New England Patriots are playing the Tennessee Titans, a user who thinks the Titans will win could buy shares on the “yes” position. Shares will be less expensive if Tennessee is the underdog, but the price is set by the markets’ perceived probability. If the Titans win, each winning share pays out $1, while those who picked the Patriots are left empty handed. 

If regulators agree with decision markets’ line of reasoning, companies like Robinhood and Kalshi should be able to offer sports contracts online in all 50 states, including states where sports betting is illegal or restricted. Gambling is banned for people under 21, but 18-year-olds are typically allowed to trade event contracts. Many sports-betting regulations — such as safeguards to prevent game fixing — do not currently apply to prediction markets. 

Not every regulator is convinced by decision markets’ arguments. In addition to New Jersey and Nevada, Connecticut, Ohio, Maryland, Illinois, and Arizona have sent Robinhood and other decision markets cease-and-desist letters. 

Nonetheless, the decision markets have amassed some powerful allies. 

In January, Donald Trump, Jr. joined Kalshi as a strategic advisor. Polymarket’s return to the U.S. and its legalization came, in part thanks to the president’s son becoming an investor and advisor.

In September, President Trump nominated Kalshi board member Brian Quintenz to chair the CFTC. A month later, Trump Media announced a prediction market partnership involving Crypto.com and Truth Social. 

Everything, everywhere, all at once

Folding sports contracts, stock trades, online banking, and crypto into a single app will inevitably upset traditionalists. Old-school investors might also be skeptical of Robinhood’s other announcements on Tuesday, focused on artificial intelligence: upgrades to its AI-powered investing assistant and the launch of personalized daily Digests that analyze users’ portfolios. 

For Robinhood, the grab bag of choices is the point. “Everything comes down to: What does the customer want?” Hickerson says. Robinhood takes feedback seriously, he said, and executives have heard “loud and clear that these are some features that they really want to trade on.” 

Scrolling through the contracts on any prediction market reveals just how many topics inspire speculation. As of Monday, more than $17,000 in contracts had been traded on Kalshi related to the topic: “What will Vlad Tenev say during the Robinhood keynote?” (Trading activity indicates a 72% chance that Tenev says “sport.”)

“Ultimately,” Oren Naim, Robinhood’s vice president of platforms, says, “our long-term vision for the company is to become your one-stop shop for anything — any financial need — across the board.” 

source https://www.fastcompany.com/91460824/robinhood-gambling-bets-kalshi-polymarket