Robinhood CEO Tenev: Sports Contracts Will Become a Minority in the Coming Years
Vlad Tenev, Chairman and CEO of Robinhood, stated that crypto-related event contracts have occupied a disproportionate share in the company's prediction market, and he expects that sports contracts will become a minority in the coming years, similar to overall active trading.
Tenev referred to sports contracts as an entry point for customer acquisition, liquidity, and building attention, but noted that the industry has rapidly expanded beyond sports. He emphasized that event contracts are about trading future outcomes, regulated by the Commodity Futures Trading Commission (CFTC) as derivatives, rather than a rebranding of sports betting.
In Q2 2026, Robinhood executed 13.6 billion event contracts, generating approximately $156 million in revenue, more than ten times year-on-year, and for the first time exceeding crypto trading revenue; during the same period, crypto trading revenue was about $100 million, down approximately 38% year-on-year, while stock trading revenue was about $129 million. Approximately 5 billion contracts were related to the World Cup, yet crypto contracts still captured a larger share of activity.
In August, event contracts were executed approximately 4.7 billion times, about 15 times the same period last year. The company stated that over the past year, the platform cleared about 9 billion event contracts, and the prediction market has become the fastest-growing revenue line. The product began with contracts for the presidential election in October 2024, with an independent prediction market center launching in March 2025.
The clearing channels have expanded from a single venue to multiple venues: contracts continue to route to Kalshi and ForecastEx, and there is also a joint venture with Susquehanna, holding a CFTC license, Rothera, and investments in Crypto.com and its prediction market subsidiary OG.com, adding a third clearing settlement path. Sports contracts are currently under litigation, with New York State suing Kalshi for over $36 billion and seeking a nationwide injunction, as some cities view sports event contracts as unlicensed sports betting.
The pricing is driven by event-driven categories. Buyers are platform funds and market makers treating the prediction market as a new trading engine, while sellers are funds still valuing the business based on sports betting. Transaction fees have shifted from sports season pulses to continuous contracts based on crypto prices, policies, and company events; beneficiaries are Robinhood, which has multi-venue routing and its own clearing, while pressured parties are sports contract venues relying on sports traffic and facing state law barriers.
Source: Public Information
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Tenev integrates the prediction market into three strategic arcs of active trading: testing the waters with election contracts in 2024, building an independent center in 2025, and exceeding spot crypto revenue in 2026. He is also advancing tokenized stocks, Robinhood Chain, and retirement account matching, all under the theme of ownership. The company is not establishing a sports betting business but is migrating the same active accounts from options and crypto spreads to event contract fees. The joint venture with Susquehanna captures the original LedgerX system, and further investments in Crypto.com and OG.com bind market making, clearing, and traffic entry to its own accounts.
The capital pathway is "wholesale channel + retail distribution." Kalshi provides early liquidity and election categories, Rothera supplements its own CFTC infrastructure, and OG.com adds crypto users and seasonal contracts like soccer. Money flows from retail nominal principal into multi-venue matching, with Robinhood earning routing and trading fees, while market makers profit from spreads. The motivation is to shift volatility to contracts under the same regulatory framework as crypto spot revenue declines; sports only serve customer acquisition, not profit structure.
There are ongoing state law battles against Kalshi and Polymarket, as well as licensing wars for sports betting with DraftKings and FanDuel. Robinhood is transitioning from a traffic entry point to clearing control: the retail side has already executed trades, while the exchange side is buying minority stakes and joint venture licenses. The industry is not expanding user numbers but shifting categories from seasonal sports to daily settled crypto and macro events.
The structural change is a transfer of pricing power. Sports outcomes are priced under state betting laws, while crypto and macro events are priced under the CFTC derivatives framework. Whoever can turn contracts into federal derivatives can bypass state sports licenses; whoever remains nominally in sports will be locked down by New York-style litigation. The mechanism is that regulatory classification determines tradable duration: sports have seasons and bans, while crypto prices open daily, thus transaction fees shift from pulses to stock.
ABAB News · Law of Cognition
Customer acquisition categories are few equals profit categories
Regulatory classification determines market size more than gameplay names
Continuous volatility consumes seasonal traffic