Robinhood Earned 8% Less per Prediction Market Contract as Trading Rose 21%

Robinhood earned about 1.05 cents per event contract in the third quarter, down from 1.15 cents three months earlier, an FM Intelligence analysis published today (Tuesday) found. Its customers traded about 21% more contracts over the quarter, while revenue from them rose 11%.

Event contracts brought in $173 million between July and September, more than the $120 million Robinhood earned from crypto and about 12% of its net revenue.

Of the retail platforms reviewed in the FM Intelligence analysis, Robinhood is the only one that publishes both contract counts and revenue for the product. That makes its ratio the one public benchmark for brokers pricing it.

Other retail firms are moving in. IG Group agreed to pay up to $1.3 billion for Underdog in July, and Coinbase said its prediction markets passed $200 million in annualized revenue in the third quarter.

London's trading industry is coming home!

Trading Grew About Twice as Fast as Revenue

Customers traded 16.4 billion contracts in the quarter, up from 13.6 billion, while revenue rose from the $156 million FinanceMagnates.com reported for the second quarter.

The same division gave 1.18 cents in the first quarter. Rounding in the reported figures puts the latest fall between 7% and 9% from the second quarter.

Robinhood gave part of the explanation on its October 27 earnings call, where management described a pricing change made after it took over an exchange with Susquehanna and renamed it Rothera.

"We lowered pricing for customers when we bought Rothera," Chief Financial Officer Shiv Verma said.

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Verma said the change did not affect Robinhood's take rate and later tied lighter rates to what customers were trading. Non-sports contracts made up about 30% of activity in the quarter, up from 15% in the second, he said.

The ratio cannot tell those two forces apart. Each contract pays out at most $1, so one bought for a few cents counts the same as one bought near even money, and Robinhood reports how many changed hands but not the average price paid.

Part of the Revenue Now Comes From Rothera

The reported figure also mixes in a second business. Rothera, the joint venture Robinhood controls with Susquehanna International Group, accounted for $28 million of the $173 million, against $17 million a quarter earlier, according to Robinhood's earnings presentations.

That makes the 1.05 cents a blend of exchange revenue and what Robinhood earns from its own customers, so it overstates what a retail broker without an exchange could expect. The analysis strips Rothera out and shows how much further the rest of the line fell.

Rothera's share is set to grow. Verma said it would become Robinhood's primary exchange, with Crypto.com second, and that most flow would go through the two by early next year.

That flow used to go elsewhere. Robinhood drove more than half of Kalshi's volume after it launched event contracts in March 2025, FinanceMagnates.com reported in January.

In September, Robinhood took a stake in Crypto.com and its prediction markets unit OG. Its quarterly filing says it can earn up to 10% of Crypto.com and affiliates over three years in return for routing orders there.

States are narrowing the product as well. Robinhood has stopped offering new sports contracts in Nevada, Michigan and Ohio, according to the filing, and new taxes on prediction market revenue in North Carolina and Kentucky take effect on January 1.

The analysis also sets Robinhood's event contract revenue against Plus500's group revenue, using volume estimates from FM Intelligence's broker volumes tool.

The full FM Intelligence analysis gives revenue per contract with and without Rothera, the sports share implied by management's comments and a fourth-quarter revenue range of $156 million to $198 million.