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Market themes↑ heating up

The prediction market boom

Brokers now sell bets on sports and news as federal contracts, lifting Robinhood and drawing fire from sportsbooks and states.

Market value moved since Mar 2025
+$42Bwinners−$36Blosers

Combined change in market value of the companies the theme hits directly. Ripple effects aren't counted, and not every dollar of each move is down to this theme.

What's happening

An event contract is a yes-or-no bet priced like a stock. It pays $1 if something happens, such as a team winning or the Fed cutting rates, and nothing if it doesn't, so a price of 60 cents means traders see about a 60% chance. Exchanges like Kalshi register with the CFTC, the federal regulator for futures, and argue that makes them federal markets rather than state-licensed gambling. That lets them sell sports contracts in states like California and Texas, where sports betting is illegal. Sports made up 72% of Kalshi's volume so far this year. Brokers earn a small fee on every contract. When Robinhood started in March 2025, it charged 2 cents a contract and split it with Kalshi. Last quarter Robinhood earned $156 million on 13.6 billion contracts, about 1.1 cents each. In June it opened its own exchange, Rothera, with trading firm Susquehanna, so it no longer has to send every trade to Kalshi.

Who wins, who pays, and why

Robinhood wins most. Event contracts brought in $156 million last quarter, 12% of its revenue and more than crypto's $100 million. Coinbase sells Kalshi's contracts and says that business passed $100 million a year in revenue. Kalshi was valued at $22 billion in March, and NYSE owner ICE agreed in 2025 to invest up to $2 billion in Polymarket. Sportsbooks pay. DraftKings and FanDuel owner Flutter need a license in each state and pay gaming taxes as high as 51% in New York; prediction markets pay little or no state gaming tax. Both now sell their own contracts, but FanDuel's US sportsbook revenue still fell 15% last quarter. States lose that tax money, so several are suing, and the CFTC has sued nine states to stop them.

Where it stands Appeals courts split, and New Jersey asked the Supreme Court to decide on Sept. 2. Robinhood's August contract volume fell 23% from July but was 15 times a year earlier.

Who wins, who loses

Tends to rise
  • Robinhood MarketsHOOD
    +$42B market value since Mar 2025

    Event contracts brought in $156 million last quarter, 12% of revenue and more than crypto's $100 million, on 13.6 billion contracts traded.

    Read the breakdown →
  • CoinbaseCOINripple effect

    Sells Kalshi's contracts; that business passed $100 million a year in revenue. New York is suing it, seeking at least $2.2 billion.

    Read the breakdown →
Tends to fall
  • DraftKingsDKNGnot in the 100
    −$9B market value since Mar 2025

    Down 48% since March 2025. Fell 11.6% in one day as Kalshi's football volume surged; rose 4.3% when Nevada beat Kalshi in court.

  • Flutter Entertainment (FanDuel)FLUTnot in the 100
    −$27B market value since Mar 2025

    Down 66% since March 2025, and US sportsbook revenue fell 15% last quarter. Shares rose 7.1% the day Nevada beat Kalshi.

When it moved markets

  1. Week of Aug 31Robinhood rose 17.1% for the week, including 16.6% on Thursday, after Deutsche Bank analysts called prediction markets a growing business.
  2. Week of Aug 24On Aug. 28 the Ninth Circuit ruled Kalshi's sports contracts are bets Nevada can regulate. Flutter rose 7.1% and DraftKings 4.3%; Robinhood fell 5.0%.
  3. Week of Jun 29Robinhood rose 14.2% after its June figures showed event contract trading up 60% from May, during the World Cup.

Sources

  1. 1Robinhood reports second quarter 2026 results (Exhibit 99.1) · Robinhood Markets via SEC EDGAR, 2026-07-29
  2. 2Robinhood Markets, Inc. reports August 2026 operating data · Robinhood Markets via GlobeNewswire, 2026-09-10
  3. 3Robinhood launches prediction market with March Madness, Fed rates as first offerings · Fortune, 2025-03-17
  4. 4What Kalshi's big court loss means for prediction markets · Front Office Sports, 2026-08-30
  5. 5Kalshi wins appeal against New Jersey over sports event contracts · The Block, 2026-04-06
  6. 6Prediction markets arrive on Supreme Court's doorstep · Front Office Sports, 2026-09-02
  7. 7Attorney General James sues Coinbase and Gemini for running illegal gambling platforms in New York · New York State Attorney General, 2026-04-21
  8. 8Kalshi says it's not a sportsbook even as World Cup bets surge · NPR via WUNC, 2026-07-17
  9. 9DraftKings, Flutter stocks sink. Prediction markets are gaining momentum. · Barron's via Tiger Brokers, 2025-10-01
  10. 10DraftKings reports second quarter results (Exhibit 99.1) · DraftKings via SEC EDGAR, 2026-08-06
  11. 11Flutter Entertainment announces Q2 2026 financial results (Exhibit 99.1) · Flutter Entertainment via SEC EDGAR, 2026-08-05
  12. 12Coinbase shares slip after Q2 results despite prediction markets doubling and record trading market share · The Block, 2026-07-30
  13. 13New York sues Coinbase and Gemini, seeking to halt unlicensed prediction market businesses · Spectrum News NY1, 2026-04-21
  14. 14Kalshi locks in $22 billion valuation, gaining slight edge over its rival Polymarket · Fortune, 2026-03-20
  15. 15ICE announces strategic investment in Polymarket · Intercontinental Exchange, 2025-10-07
  16. 16Robinhood shares gain as June trading activity reaches new highs (HOOD) · Yahoo Finance, 2026-06-29
  17. 17S&P 500 posts back-to-back gains as Treasury yields retreat · CNBC, 2026-09-03
  18. 18Robinhood Markets (HOOD) historical prices · Yahoo Finance, 2026-10-09
  19. 19DraftKings (DKNG) historical prices · Yahoo Finance, 2026-10-09
  20. 20Flutter Entertainment (FLUT) historical prices · Yahoo Finance, 2026-10-09