Robinhood says prediction markets have exploded in growth over the past quarter, one of the company’s latest business lines to generate $100 million or more in annualized revenue.
“Prediction markets are really on fire,” Robinhood CEO Vlad Tenenv said on the company’s earnings call Nov. 5. “It’s hard to believe we launched this just about a year ago with the presidential election market. We’ve doubled volume every quarter since then to 2.3 billion contracts in Q3.”
In October alone, the total number of event contracts traded on the platform has already exceeded that number, jumping to 2.5 billion.
Robinhood (HOOD), which partners with Kalshi, a federally regulated prediction market, has expanded its categories to include sports, economic…
Robinhood says prediction markets have exploded in growth over the past quarter, one of the company’s latest business lines to generate $100 million or more in annualized revenue.
“Prediction markets are really on fire,” Robinhood CEO Vlad Tenenv said on the company’s earnings call Nov. 5. “It’s hard to believe we launched this just about a year ago with the presidential election market. We’ve doubled volume every quarter since then to 2.3 billion contracts in Q3.”
In October alone, the total number of event contracts traded on the platform has already exceeded that number, jumping to 2.5 billion.
Robinhood (HOOD), which partners with Kalshi, a federally regulated prediction market, has expanded its categories to include sports, economics, politics, and culture, Tenev said on the call.
Have an opinion about the S&P 500’s closing price at the end of 2025? Or whether Treasury note yields will hit 5% this year? Prediction markets give you the chance to put money on those event outcomes and earn payouts for being right.
Learn how prediction markets work, what the risks are, and which platforms are available in the U.S.
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Prediction markets are exchanges where people can bet on event outcomes. The bets are usually made by purchasing binary contracts that pay out if the event unfolds the way you expect. In this context, binary means there are only two outcomes — often yes or no — and your contract bets on one of them.
The cost of an event contract is less than the payout. How much less depends on the odds, which are based on contracts already purchased.
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Take this question: Will gold outperform bitcoin this year?* *Let’s assume a $1 contract payout. If 80% of users believe the answer is yes, the price on the “yes” position is probably near $0.80. And the “no” position would cost about $0.20. No matter which position you buy, you get $1 if you are right. In the less likely scenario that gold does not outperform bitcoin, your cost is lower while the return and the risk are higher.
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**Transaction fees. **Prediction market platforms can make their money on transaction fees or by leveraging the bid-ask spread. Fees can be variable based on how much you spend. The platform Kalshi usually charges $0.02 to buy a $0.40 contract and $1.68 to buy 100 $0.40 contracts. Competing platform Polymarket does not charge fees and instead earns on the difference between the bid price and the higher selling price. 1.
**Funding. **Platforms typically require you to open and fund an account before buying event contracts. The platform will specify your funding options. Kalshi accepts deposits from bank accounts, debit cards, wire transfers, and cryptocurrency wallets. Polymarket accounts are funded with USDC, a stablecoin. 1.
**Interest. **Some platforms may pay interest on your account balance. As of August 2025, qualified accountholders on Kalshi can earn interest on their uninvested cash and open positions. 1.
**Trading contracts. **If you lose confidence in your position, you can sell contracts before the event occurs. For example, if you own “yes” contracts on gold outperforming bitcoin and you change your mind, you can sell those contracts for the market price — to the extent there are willing buyers. 1.
**Orders. **Prediction markets platforms typically support limit orders. A limit order specifies the price at which you want to buy or sell a position. 1.
Event topics. Prediction markets can cover events in sports, politics, culture, climate, technology, world news, and more.
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Leo Chan, CEO and co-founder of decentralized AI platform Sportstensor, explains that “prediction markets are the embodiment of the wisdom-of-the-crowd phenomena but with financial stake.”
Chan’s description points to two reasons why prediction markets are making headlines:
**Crowdsourced insights. **Prediction market odds gauge how people are thinking about current events, and there is evidence that these odds can be accurate. As an example, prediction markets predicted the outcome of the 2024 U.S. presidential election when the polls said otherwise. “They’re a great way to find out the real probability of an event,” said InGame’s business and finance reporter Daniel O’Boyle. 1.
**Trading for the masses. **With prediction markets, you can bet on event outcomes that interest you, with the added incentive of a financial reward for being right.
The risks of participating in prediction markets include financial losses and questionable legality.
Event contracts are speculative. You can easily be wrong and lose what you’ve invested. Even worse, the cards could be stacked against you if the other participants are well-funded market makers who are buying and selling contracts on the same events at different prices.
“There’s a very good chance you’re not betting against another small-time trader like yourself,” said O’Boyle. “The market maker might even be owned by the same company that owns the exchange.”
“Real-money prediction markets that operate in the U.S. are regulated by the Commodity Futures Trading Commission (CFTC), the same body that regulates oil or corn futures,” explains O’Boyle.
In 2022, prediction markets operator Polymarket stopped accepting bets from U.S. users at the CFTC’s request. The CFTC also fined Polymarket $1.4 million, claiming the marketplace was an unregistered derivatives platform.
Under the Trump administration, the CFTC investigation and another Polymarket inquiry by the Department of Justice are now closed. But state regulators continue to question the legality of sporting event contracts, according to Covers’ senior news analyst Geoff Zochodne, and several cases against Kalshi are ongoing.
Prediction market platforms available to U.S. users include:
**Kalshi. **Offers a wide range of event categories and multiple funding options. 1.
Crypto.com. The Prediction Trading marketplace offers $10 payouts. 1.
**Robinhood. **It launched a prediction markets hub in the Robinhood app in 2025.
Polymarket gained CFTC approval to relaunch in the U.S. in September 2025. The platform also recently purchased QCEX, a licensed derivatives exchange and clearinghouse.
Prediction market participants buy contracts that pay on specified event outcomes. The cost of the contract aligns with the odds of that outcome. The odds can change as the event approaches and more people take positions or new information becomes available. Once the event happens, those who accurately predicted the outcome receive their payout.
Experts are divided on whether prediction markets facilitate gambling. Leo Chan, CEO and co-founder of decentralized AI platform Sportstensor, said intent differentiates prediction markets from gambling.
In Chan’s view, the underlying intent of event contracts is to exchange accurate information, while gambling is primarily entertainment. Daniel O’Boyle, InGame’s business and finance reporter, doesn’t see the distinction. Instead, O’Boyle believes staking money on an event outcome does constitute gambling.
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Robinhood now offers a prediction market hub within their app — a marketplace where you can trade on event outcomes. Essentially, you can buy contracts that could pay out if a sports game, political election, or economic event turns out the way you expect.
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To trade in prediction markets, first review the contract costs for events that interest you. If a contract pays $1 and costs $0.20, that typically indicates a 20% chance the event will unfold as the contract specifies.
Then, decide how you feel about the 20% odds. If the number seems too low, you might buy that contract. If the odds rise before the event happens, you can sell the contract at a higher price or hold your position to earn a payout if you think the outcome will align with your contract.
Jamie Young and Tim Manni* edited this article.*