Briefly
- Robinhood is enabling “Customized Combos” on prediction markets within the U.S.
- The NFL postseason is without doubt one of the largest moments for playing every year.
- Prediction markets are Robinhood’s fastest-growing product line by income.
Robinhood is enabling “Customized Combos” for customers wagering on skilled soccer, underscoring efforts to flesh out its prediction market providing as playing heats up within the U.S. alongside the NFL postseason, the corporate mentioned Friday.
The contracts are regulated by the Commodity Futures Buying and selling Fee and resemble parlays supplied by conventional gaming corporations Draft Kings and FanDuel, permitting customers to foretell the chance of a number of outcomes without delay, together with the efficiency of particular person gamers.
Nevertheless, a Robinhood spokesperson instructed Decrypt that Customized Combos and parlays are completely different, with the primary distinction boiling right down to Kalshi’s position in facilitating wagers throughout contracts that may mix as much as 10 completely different predictions. Robinhood partnered with Kalshi for prediction markets on school {and professional} soccer this summer time.
Historically, the “home” units the chances for a bettor's parlay independently, however the payouts on Customized Combos are decided by so-called Requests For Quotes, or RFQs.
When Kalshi points an RFQ on its platform, market makers anonymously submit quotes to take the opposite aspect of a consumer’s wager and the consumer is offered with the perfect accessible value. The spokesperson famous that the RFQs can be found to anybody via Kalshi’s API. That course of requires extra technical information than searching an app from one’s sofa.
“Conceptually they’re comparable, however the way in which the contracts work is solely completely different,” the Robinhood spokesperson mentioned. “In contrast to the home that unilaterally units its odds, any participant in a prediction market will have the ability to submit a quote to take the opposite aspect of an RFQ.”
Robinhood first unveiled Customized Combos at an occasion in mid-December, wherein CEO Vlad Tenev mentioned prediction markets would change “the way forward for finance and information.” A weblog publish famous prediction markets as Robinhood’s “fastest-growing product line by income ever.”
Robinhood shares had been little modified on Friday at $110, in line with Yahoo Finance. The corporate’s inventory value has risen 140% over the previous 12 months.
Joe Maloney, senior vice chairman of strategic communications on the American Gaming Affiliation, instructed Yahoo Information earlier this week that your complete NFL postseason, main as much as the Tremendous Bowl, is among the many buzziest for bettors every year.
“The NFL actually owns the betting calendar on the subject of huge moments,” he mentioned. “It’s only a reflection of elevated confidence in authorized sports activities wagering on this nation and the recognition of the NFL, of soccer, and the joy of the playoffs.”
Robinhood’s use of the time period hints at rigidity brewing in courtrooms throughout the U.S. over how prediction markets needs to be regulated. Though corporations like Kalshi argue that they supply monetary devices for info discovery—beneath the remit of the CFTC—critics and states argue that the platforms resemble delicately disguised casinos topic to native legal guidelines.
The Robinhood spokesperson mentioned that Customized Combos can be found in each U.S. state, apart from Maryland and Nevada, the place entry to prediction markets is restricted.
In October, analysts at funding financial institution Compass Level wrote in a be aware that they’d grown bullish on Robinhood, citing skilled sports activities as a significant tailwind for the retail brokerage that helped popularize day-trading and meme shares via commission-free buying and selling. The agency fees a one-cent price per contract traded on its Kalshi-powered prediction markets.
As of this previous week, Kalshi generated $1.8 billion in buying and selling quantity from markets on sports activities, which accounted for 91% of the platform’s exercise, in line with a Dune dashboard. Throughout the identical interval a 12 months in the past, Kalshi didn’t generate any buying and selling quantity from markets on sports activities.
“At what level can we agree you're now not a 'prediction market?’” a consumer on X mused earlier this week, whereas displaying that sports activities comprised a number one 40% of quantity on Polymarket. The publish was seen over 500,000 instances.
Parlays have gotten more and more fashionable amongst these betting on sports activities within the U.S., in line with a survey launched in July by the Nationwide Council on Drawback Playing. As of 2024, 30% of People wagered on sports activities via parlays, practically doubling from 17% in 2018.
The rise raises “issues about loss-chasing behaviors,” the NCPG added, with bettors stacking a number of legs on high of one another in hopes of a much bigger payout.
