13.6bn contracts traded: Robinhood’s prediction bet pays off

August volumes fell 23% from July, while Missouri has ordered Robinhood & five rivals to stop sports contracts.

The hit

Robinhood’s event contracts business, its smallest trading category a year ago, is now its second-highest revenue trading category behind options. The unit brought in $156m in Q2, a tenfold jump on the prior year, according to Blockonomi. Trading volume hit 13.6bn contracts in the quarter, also a tenfold rise.

Why it matters

The numbers show prediction markets have gone from side bet to core business for Robinhood, with 13 segments now each topping $100m in quarterly revenue. But growth is colliding with regulators: courts, Missouri’s attorney general & tribal authorities are all pushing back on sports contracts specifically, & Robinhood itself has flagged that new laws could force a full withdrawal from the product.

The record

Six-state lawsuits	plaintiffs across six states have filed suits seeking to recoup losses under state gambling statutes
Missouri order	attorney general ordered Robinhood & 5 rivals to halt sports contracts statewide
Federal appeals court ruling	late August, favoured two Native American tribes & backed Nevada’s right to enforce gambling rules on Robinhood

What happens next

Watch Massachusetts securities regulators’ ongoing review of Robinhood’s event contracts, flagged in the firm’s latest filing, & any fresh state action following Missouri’s statewide order.

Sources: Robinhood (HOOD) Stock: Event Contracts Revenue Surges 10X Despite Mounting Legal Challenges

18+. Betting involves risk. If gambling is a problem for you or someone close to you, help is available.