(Bloomberg) — Robinhood Markets Inc. is rolling out new features for sports betting, such as predefined matching contracts for professional football games.
Clients can trade results, totals and spreads within a single game, and more than 1 million users have traded around 11 billion contracts to date, the company said in a statement on Tuesday. Early next year, customers will be able to customize combinations, with up to 10 results.
These combination contracts mimic linked series of bets known as parlays, offered by traditional bookmakers. Parlays are popular among gamblers because they offer the promise of large payouts, and are highly profitable for bookmakers due to their low odds of success.
“Eventually, our plan is to move even further, to do custom matches across all categories within the prediction markets space,” Adam Hickerson, senior director of futures and prediction markets at Robinhood, said in an interview.
In addition to combinations, Robinhood has launched individual contracts for professional American football players that track passing, receiving and rushing yards, among others, according to the release. Contracts for football players will soon be followed by other sports, Robinhood said.
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These so-called prop bets are at the center of the sports betting scandals that have erupted this year, with U.S. prosecutors accusing professional athletes of providing insider information to bettors. Regulators and sports leagues have rushed to address the new legal issues raised by prediction markets, given the lack of regulatory oversight.
Robinhood CEO Vlad Tenev said sports prediction markets are regulated entirely differently than sports betting, and have had the proper infrastructure “for decades” to manage threats from corporate insiders trading on proprietary information.
“Financial markets have the best tools to deal with this,” he said Wednesday in an interview with Bloomberg Television.
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Prediction markets have been one of Robinhood’s most successful product launches, Hickerson said.
“What we hear loud and clear from our customer base is that they want access to more information,” he said. “It’s a very, very fast-paced industry.”
The company is now a leader in sports prediction markets alongside Kalshi, Polymarket and Crypto.com. Robinhood, however, gained the upper hand after teaming up with Susquehanna International Group to buy a majority stake in LedgerX, a U.S. derivatives exchange once owned by FTX and then operated by Miami International Holdings Inc.
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“There’s a big case for this becoming an increasingly institutional business over time, in the same way that cryptocurrency markets started out being purely retail and built institutional adoption over time,” Tenev said. “The more prediction market exchanges enter the market, the greater the price competition will be.”
Shares of Menlo Park, Calif.-based Robinhood have more than tripled this year, taking its market value to more than $100 billion. The company, which recently joined the S&P 500, reported profit of $556 million in the third quarter, a 271% increase from the previous year.
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