Key takeaways
- Robinhood can earn 175 times more from predictions
- Event contracts generated $173 million in quarterly revenue
- Prediction markets create new opportunities and regulatory risks
Robinhood built its reputation on commission-free stock trading. Yet the brokerage can now generate approximately $21 from a $1,000 prediction-market transaction, compared with just 12 cents from an equivalent stock purchase.
That extraordinary difference helps explain one of Wall Street's biggest financial transformations. According to Robinhood's third-quarter results, event contracts generated $173 million in revenue, surpassing the $121 million earned from traditional equity transactions.
The gap becomes even more striking when comparing identical amounts traded. Robinhood's growing prediction business is not simply attracting more customers; it can monetize certain transactions at dramatically higher rates.
How a $1,000 Trade Can Generate 175 Times More Revenue
The difference begins with how the two markets charge for trading.
When customers purchase stocks through Robinhood, the platform generally earns money from market makers through payment for order flow rather than charging conventional trading commissions.
In the third quarter, Robinhood's equity-trading take rate averaged approximately 0.0122%. That translates into about $0.12 of revenue on a $1,000 stock purchase.
Prediction contracts operate differently.
An event contract priced at 50 cents typically pays $1 if the predicted outcome occurs and nothing if it does not. A $1,000 investment could therefore purchase 2,000 contracts.
Robinhood generated approximately 1.05 cents in average revenue per event contract during the quarter, according to a Wall Street Journal analysis.
Multiplying that average by 2,000 contracts produces approximately $21 in revenue, or 175 times the comparable stock-trading figure.
This does not mean every customer pays a 2.1% fee. Actual fees, execution prices and Robinhood's realized revenue depend on the contract and trading arrangements.
The difference reflects how much more efficiently mature stock markets price transactions compared with newer event-contract markets.
Why Predictions Became a Bigger Business Than Stocks
Robinhood entered prediction markets through its Kalshi partnership in March 2025.
Its third-quarter event-contract revenue climbed from $27 million in 2025 to $173 million in 2026, while customers traded approximately 16.4 billion contracts.
That growth helped offset a 55% decline in crypto revenue.
Robinhood is also expanding beyond distributing third-party contracts.
Its Rothera exchange, developed through a joint venture with Susquehanna, provides another source of revenue from the underlying trading infrastructure.
Meanwhile, the company is expanding into Bitcoin and gold predictions, creating additional opportunities beyond traditional sports contracts.
Can Robinhood Keep Earning So Much?
The enormous revenue difference may become harder to sustain as competitors enter prediction markets and trading costs decline.
Established exchanges are already exploring binary stock contracts, potentially introducing competition from traditional financial institutions.
Regulation presents another challenge. The distinction between prediction markets and sportsbooks remains contested, particularly for sports-related contracts.
