Robinhood Offers Prediction Market ‘Custom Combos’—But Don’t Call Them Parlays

Robinhood is enabling “Customized Combos” for customers wagering on skilled soccer, underscoring efforts to flesh out its prediction market providing as playing heats up within the U.S. alongside the NFL postseason, the corporate stated Friday.

The contracts are regulated by the Commodity Futures Buying and selling Fee and resemble parlays supplied by conventional gaming firms Draft Kings and FanDuel, permitting customers to foretell the chance of a number of outcomes directly, together with the efficiency of particular person gamers.

Nonetheless, a Robinhood spokesperson informed Decrypt that Customized Combos and parlays are completely different, with the principle distinction boiling all the way down to Kalshi’s position in facilitating wagers throughout contracts that may mix as much as 10 completely different predictions. Robinhood partnered with Kalshi for prediction markets on faculty {and professional} soccer this summer season.

Historically, the “home” units the percentages for a bettor’s parlay independently, however the payouts on Customized Combos are decided by so-called Requests For Quotes, or RFQs.

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When Kalshi points an RFQ on its platform, market makers anonymously submit quotes to take the opposite facet of a consumer’s wager and the consumer is introduced with the most effective out there value. The spokesperson famous that the RFQs can be found to anybody via Kalshi’s API. That course of requires extra technical information than looking an app from one’s sofa.

“Conceptually they’re related, however the best way the contracts work is totally completely different,” the Robinhood spokesperson stated. “In contrast to the home that unilaterally units its odds, any participant in a prediction market will be capable to submit a quote to take the opposite facet of an RFQ.”

Robinhood first unveiled Customized Combos at an occasion in mid-December, wherein CEO Vlad Tenev stated prediction markets would change “the way forward for finance and information.” A weblog publish famous prediction markets as Robinhood’s “fastest-growing product line by income ever.”

Robinhood shares have been little modified on Friday at $110, in accordance with Yahoo Finance. The corporate’s inventory value has risen 140% over the previous 12 months.

Joe Maloney, senior vp of strategic communications on the American Gaming Affiliation, informed Yahoo Information earlier this week that the whole NFL postseason, main as much as the Tremendous Bowl, is among the many buzziest for bettors annually.

“The NFL actually owns the betting calendar relating to huge moments,” he stated. “It’s only a reflection of elevated confidence in authorized sports activities wagering on this nation and the recognition of the NFL, of soccer, and the thrill of the playoffs.”

Robinhood’s use of the time period hints at rigidity brewing in courtrooms throughout the U.S. over how prediction markets ought to be regulated. Though firms like Kalshi argue that they supply monetary devices for data discovery—underneath the remit of the CFTC—critics and states argue that the platforms resemble delicately disguised casinos topic to native legal guidelines.

The Robinhood spokesperson stated that Customized Combos can be found in each U.S. state, aside from Maryland and Nevada, the place entry to prediction markets is restricted.

In October, analysts at funding financial institution Compass Level wrote in a notice that that they had grown bullish on Robinhood, citing skilled sports activities as a serious tailwind for the retail brokerage that helped popularize day-trading and meme shares via commission-free buying and selling. The agency costs a one-cent charge per contract traded on its Kalshi-powered prediction markets.

As of this previous week, Kalshi generated $1.8 billion in buying and selling quantity from markets on sports activities, which accounted for 91% of the platform’s exercise, in accordance with a Dune dashboard. Throughout the identical interval a 12 months in the past, Kalshi didn’t generate any buying and selling quantity from markets on sports activities.

“At what level will we agree you are now not a ‘prediction market?’” a consumer on X mused earlier this week, whereas exhibiting that sports activities comprised a number one 40% of quantity on Polymarket. The publish was seen over 500,000 instances.

Parlays have gotten more and more standard amongst these betting on sports activities within the U.S., in accordance with a survey launched in July by the Nationwide Council on Drawback Playing. As of 2024, 30% of People wagered on sports activities via parlays, almost doubling from 17% in 2018.

The rise raises “issues about loss-chasing behaviors,” the NCPG added, with bettors stacking a number of legs on high of one another in hopes of an even bigger payout.