What Robinhood Said About Prediction Markets In Q3 Earnings
Event contracts in October have already surpassed all of Q3 at Robinhood. Roundup: Schwab CEO warns of 'blending’ of sports betting and investing.
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Robinhood released its Q3 earnings report on Wednesday, and, not shockingly, there was a lot of talk about prediction markets. The financial platform has been working with Kalshi to offer prediction markets for the past year.
Here’s what came out of HOOD 0.00%↑ earnings about the prediction markets segment:
From the Robinhood press release
“Our team’s relentless product velocity drove record business results in Q3 and we’re not slowing down — Prediction Markets are growing rapidly, Robinhood Banking is starting to roll out, and Robinhood Ventures is coming,” said Vlad Tenev, Chairman and CEO of Robinhood.
“Q3 was another strong quarter of profitable growth, and we continued to diversify our business, adding two more business lines—Prediction Markets and Bitstamp—that are generating approximately $100 million or more in annualized revenues,” said Jason Warnick, Chief Financial Officer of Robinhood. “And Q4 is off to a strong start in October, with record monthly trading volumes across equities, options, prediction markets, and futures, and new highs for margin balances.” …
“In August, Robinhood launched Pro and College Football contracts within its Prediction Markets Hub. In Q3 2025, total Event Contracts Traded more than doubled sequentially to 2.3 billion, and October 2025 totaled 2.5 billion contracts, more than all of Q3 2025.”
(Kalshi did about $4.4 billion in trading volume in October, meaning more than 55% of all volume is coming via Robinhood.)
From the Robinhood presentation
Prediction markets are included in the “other” category:
The footnote says “Prediction markets annualized revenues were ~$45M in Q2’25 and ~$115M in Q3’25.”
From the Robinhood earnings call
Tenev: “Prediction markets are really on fire. It’s hard to believe that we launched this just about a year ago, with the presidential election markets. We’ve doubled volume every quarter since then to 2.3 billion contracts in Q3, and the month of October alone was up to 2.5 billion contracts. So October by itself was bigger than all of Q3 combined.”
And during Q&A:
Question: So I had one on prediction markets. You’ve obviously become one of the leaders in the space, but there’s been a lot of new entrants recently. So I was hoping you could talk about just the strategy there and what you think gives you the right to win long term?
And then as a second part to that, talk through some of the strategic considerations around maintaining your position today as kind of a retail distribution for the venues versus maybe trying to develop something internally, whether that’s organic, or inorganic? Thanks.
Tenev: So I think one of the advantages we have entering any market, prediction markets aren’t an exception, is that we have distribution and we have lots of customers, 26 million plus funded accounts in the US. That are trading and using us for all sorts of things. And from an infrastructure standpoint, we actually have an increasing set of tools that can plug in and are being built to be multi-asset. So not just our mobile app, but increasingly on the web, we have Robinhood Legend. We have all of these things that we announced at Hood Summit. And it’s really an ecosystem of financial services.
And you’ll see great integration between all of our platforms and all of our assets and account types increasingly so in the future. I think when we think about vertical integration, like should we be a market maker or should we be an exchange in any asset, one thing we look at is, is the vertical integration going to be accretive to us? Is it gonna be something that is increasingly commoditized over time? And my feeling for how this is going to evolve in prediction markets at least, is there’s gonna be a lot of entrants in the space, a lot of exchanges.
And in the same way that across equities and options, customers are well served because there’s a wide variety of venues that are competing on cost to offer great execution. I think prediction markets will evolve that way too. And I think in that world, the customer certainly benefits because different DCMs and markets will compete for who offers the lowest cost. And I think the power continues to be in our distribution and offering a wide variety of products and services. And we’re the only ones currently that have this powerful combination of, for traders, not just being able to trade prediction markets, but crypto, options, equities, futures.
I think it’s a great combination and there’s certain advantages for everything being in one place under a simple easy-to-use platform. And I think we can keep pressing on that advantage. And as you’ve noticed, I think the product has continued to evolve at a pretty rapid pace. I think you should expect that to continue and to even accelerate.
…
Question: Maybe my question will go toward prediction markets. So maybe if you can just talk about how the customer behavior has been forming just in the last two months. We’ve seen a big increase in volume, obviously, in September with the NFL and college games added. And how are you seeing that maybe sort of shape in coming into October?
Or are you seeing that volume increase coming from more new users coming into the prediction markets or rather greater usage of existing users? And then if you can talk about maybe just your thoughts around the timeline of launching new contracts and potentially even weaving in things around maybe single stocks that active traders can start using.
Tenev: Yeah. I can start. We are working on this. We’ve actually increased the diversity of the contracts we offer tremendously in the past few weeks. Launching entirely new categories. I mean, lots of new entertainment and culture markets. You’ve seen us broaden out the technology markets as well. So now we’re offering over a thousand live event contracts for customers to trade. We’re seeing a lot of adoption. It might not be a surprise because we have such a large established customer base. A lot of adoption from existing users, particularly traders, but we’re seeing new customers as well. So there are customers that join Robinhood Markets, Inc. because they want access to our prediction markets offering.
And I think there’s plenty more we could do, not just increasing contract diversity, but making the user experience better, making it a little bit more discoverable in the product. And the team continues to work hard. You should see the product continue to improve week over week.
Warnick: Much like our active trader offering, a relatively smaller portion of our customers are participating in the market. And I think as we continue to work on the user interface and discoverability of the product, we’ve got an expectation that we can take that higher.
…
Question: And very impressive, there’s been a huge increase in predictions market activity. I’m curious if the volume shown in the platform is a mixture of Kalshi and Robinhood Markets, Inc. or is it just pure Robinhood Markets, Inc.? And also, is Robinhood Markets, Inc. considering expanding this internationally? Even alongside or even ahead of its current trading extension plan.
Shiv Verma (Incoming CFO): The volumes that we’re showing are the volumes that are on Robinhood Markets, Inc. I’m sure Kalshi is counting the activity that we send to them, is quite substantial. And for contracts that we offer, I think a very large chunk of Kalshi’s volume is actually coming from Robinhood Markets, Inc. In terms of international, Vlad, I’ll let you cover that one.
Tenev: Yeah. We’re definitely looking into it closely. And, you know, you talk about tokenization as some of the previous callers have brought up. Prediction markets is another asset class that actually has a strong crypto component, particularly outside the US. So we’re definitely taking a look at what’s the most effective way to get that to our customers. And I think it’s going to be on a case-by-case basis, maybe slightly different in each jurisdiction. But we have some options. As a scaled traditional player, but also on the crypto side. I think we will have our pick of what’s best in each jurisdiction. And that’s something we’re definitely closely looking at.
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Prediction markets roundup
We must combat ‘blending’ of sports betting and investing, warns Schwab CEO (Investment News): “Schwab CEO Rick Wurster warned of the ‘conflation between gambling and investing’ in his keynote session to registered investment advisors on Wednesday at Schwab IMPACT in Denver. Wurster’s remarks took aim at the ‘blending’ of sports betting and prediction markets within financial services. Brokerages such as Robinhood and Interactive Brokers offer prediction markets for users to place wagers on the outcome of events like sports and politics. Americans legally bet $150 billion on sports last year as roughly 40 states now offer legal sports betting.
“Only 5% of the people that go on gambling apps pull out more money than they put into the gambling app, it is the opposite of the benefits of being a long-term investor. I hope as an industry, we’re able to tell the story to clients about the difference between gambling and investing,” Wurster said. “I just don’t want young people in our country that think that betting on the Monday Night Football game is equivalent to being invested for the long term in stocks and bonds.”
💡My take: I’d say it’s encouraging if we’re not careening toward a world where we have sports betting in lots of brokerage and other financial apps. We have seen a trend that prediction markets can get added to almost any consumer-facing app or site.
It’s also notable that Charles Schwab himself invested in Kalshi.
A Momentarily Comprehensive Guide to Prediction Markets Inside the race to build Kalshi (Will Ventures’ Substack): “I think there’s an interesting misalignment between how the media talks about Kalshi and Polymarket, and how the two companies’ investors probably view them. The media’s focused on how prediction markets are upending the sports betting industry. I’ve seen endless commentary on Kalshi’s growing NFL volumes, sportsbooks’ plummeting stocks, Kalshi & Polymarket’s NHL deals, and DraftKings’ acquisition of the CFTC-licensed startup Railbird. Of course, sports are a large part of prediction markets’ current hype cycle. Since the start of NFL season, sports have made up around 90% of total Kalshi trading volume.”
“But I think Kalshi and Polymarket’s investors are paying much less attention to sports than the media thinks. Sequoia and a16z recently backed Kalshi at $5 billion – and Kalshi’s now seeking a $10-12 billion valuation. Intercontinental Exchange just backed Polymarket at $9 billion, after Founders Fund led a round – and Polymarket’s now seeking a $12-15 billion valuation.”
💡My take: This is a really good read and you should click through. I am often pretty in the weeds just trying to cover the news of prediction markets and the disruption in the gambling industry. But the long-term story of prediction markets is information and how valuable that can be in the world. For instance, Intercontinental Exchange talked about its $2 billion investment in Polymarket, and its CEO kind of shrugged his shoulders about sports betting. Right now, sports betting and gambling are big stories, and it’s a huge pain in the ass for state-regulated sportsbooks. But the prediction markets aspire to be much bigger than sports betting exchanges.
Prediction market traders slash odds Trump tariffs survive Supreme Court ruling (CNBC): “Traders slashed odds that the Supreme Court will uphold President Donald Trump’s aggressive tariffs after justices on Wednesday signaled doubts about the legality of the administration’s sweeping trade powers. On Kalshi, contracts tied to whether the court would rule in favor of Trump’s tariffs slipped to around 30% from nearly 50% before Wednesday’s hearing. A similar contract on platform Polymarket dropped to about 30% from more than 40% earlier in the week, reflecting traders’ growing belief that the justices may strike down the policy.”
One more word on prediction markets and the race for NYC mayor: On social media over the past day, I’ve seen a lot of versions of: “Polymarket/Kalshi knew the NYC mayoral race was over months ago” and “Polls are useless, prediction markets are the future.”
Did Polymarket and Kalshi have Zohran Mamdani as a massive favorite heading into Election Day? Yes! Did polls have Mamdani as a massive favorite heading into Election Day? Also yes!
Also, saying that polls don’t matter and prediction markets are the only source of truth kind of ignores the idea that polling is at least one of many pieces of data people use to trade on elections. Polls certainly have their issues in the current environment, but they’re not useless. A blended average of polls was closer to pegging Mamdani’s margin of victory than Kalshi’s market, for instance. Here’s that average per Race to the WH (the final margin appears like it will be about 9%):
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A new Substack from Polymarket:
Is the idea that “Kalshi is just sports” a psyop?: The short answer is “no.” Where did the question come from? Why John Wang, who does crypto stuff at Kalshi, apparently:
You can certainly trade on lots of stuff at Kalshi. But most people don’t. Most people bet on sports. Even in the past week — inclusive of Election Day — sports was 84% of Kalshi’s volume. Since the start of football season, sports has been about 90% of volume. Sorry, that’s not a psyop, that’s just reality.
