Robinhood’s prediction-market revenue surged more than sixfold to $173 million in the third quarter, exceeding its cryptocurrency trading revenue as cryptocurrency sales fell 55% from a year earlier.
The online brokerage lets customers trade stocks, options, cryptocurrencies, and event contracts. These contracts allow traders to take positions on the outcomes of events ranging from sports games to economic reports and elections.
Robinhood’s third-quarter results showed that cryptocurrency trading revenue fell to $120 million, even as growth in options and prediction markets helped lift total revenue 12% to a record $1.42 billion.
The company’s net income declined 14% to $476 million, and diluted earnings per share fell to $0.51 from $0.61 a year earlier. The results included a $67 million unrealized investment loss, primarily related to Robinhood Ventures Fund I.
Robinhood (HOOD) shares fell about 3.58% to $91.18 in afternoon trading on Oct. 28 following the earnings report.
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Prediction markets grow as Robinhood expands beyond sports
Robinhood customers traded a record 16.4 billion event contracts in the third quarter, up from 13.6 billion in the previous quarter, according to the company’s earnings presentation.
Revenue from event contracts rose to $173 million from $156 million over the same period. The business had already generated more revenue than crypto trading in the second quarter.
Trading volume increased about 21% from the previous quarter, compared with an 11% increase in revenue.
The revenue number also included $28 million from Rothera, a separately operated prediction-market exchange established through Robinhood’s joint venture with trading firm Susquehanna International Group.
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Robinhood is expanding beyond the sports contracts that have driven much of the prediction-market industry’s activity.
During the company’s Oct. 27 earnings call, Chief Financial Officer Shiv Verma said non-sports contracts accounted for roughly 30% of prediction-market activity, up from about 15% in the previous quarter.
Robinhood has been adding contracts tied to cryptocurrencies, commodities, and other financial events. It is also preparing products that would let customers trade on whether companies report earnings above or below specified levels.
Unlike a stock, which represents ownership in a company, an event contract’s payout depends on the outcome of a specific question.
CEO Vlad Tenev told investors that Robinhood sees an opportunity in financial-event contracts, where it can draw on its existing brokerage business. He also expects competition in sports contracts to increase as more platforms enter the market.
Midterms could bring new traders, but keeping them is the test
Robinhood launched a dedicated U.S. Midterms Hub in September, giving customers access to event contracts tied to congressional control and other election outcomes ahead of the Nov. 3 midterm elections.
Interest in election-related trading has increased across the industry.
More than $220 million had been wagered on 2026 congressional election markets across Kalshi and Polymarket platforms through September, according to Reuters, citing research from the Anti-Corruption Data Collective.
Trevor Traina, founder and CEO of digital-asset company Kresus Labs and a former U.S. ambassador to Austria, believes major elections can introduce new users to prediction markets.
“I see them now as onboarding catalysts to bring more people onto the platforms,” Traina said in written comments provided to TheStreet.
Traina expects some of that interest to continue after elections. But Robinhood has not disclosed retention figures showing how many customers first attracted by major events remain active afterward.
The industry also faces regulatory uncertainty.
State authorities and prediction-market operators have been fighting over whether sports-related event contracts fall under state gambling laws or federal derivatives regulation, according to Reuters.
Robinhood is developing contracts tied to recurring financial events, including corporate earnings, that could give customers reasons to trade throughout the year.
After the Nov. 3 elections, the company will have another opportunity to see whether trading activity extends beyond major sporting and political events as its financial-contract offerings expand.
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