Robinhood Gives Prediction Market 'Customized Combos'—However Don't Name Them Parlays – Decrypt

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 without delay, together with the efficiency of particular person gamers.

Nonetheless, a Robinhood spokesperson advised Decrypt that Customized Combos and parlays are totally 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 totally different predictions. Robinhood partnered with Kalshi for prediction markets on school {and professional} soccer this summer time.

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

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

“Conceptually they’re comparable, however the way in which the contracts work is completely totally different,” the Robinhood spokesperson stated. “Not like the home that unilaterally units its odds, any participant in a prediction market will be capable of submit a quote to take the opposite aspect of an RFQ.”

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

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

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

“The NFL actually owns the betting calendar in the case of 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 pressure brewing in courtrooms throughout the U.S. over how prediction markets must be regulated. Though firms like Kalshi argue that they supply monetary devices for info 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 word that they’d grown bullish on Robinhood, citing skilled sports activities as a serious tailwind for the retail brokerage that helped popularize day-trading and meme shares by commission-free buying and selling. The agency prices 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 line 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 can 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 put up was considered over 500,000 occasions.

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

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