Event contracts brought Robinhood $156 million in the second quarter of 2026, more than the company earned from either equities or cryptocurrencies, according to its Q2 10-Q filing. That makes prediction markets the second-largest of Robinhood’s trading lines, behind only options, a year after the product was barely a rounding error. It also means the business now most exposed to an escalating legal fight is one of the ones carrying the company’s growth.
This is not a new disclosure; the figure comes from results Robinhood reported on July 29. What makes it worth revisiting now is the calendar. The White House is expected to host crypto and prediction-markets executives on Wednesday, with Robinhood among the companies invited, according to reporting first published by Politico, and the CFTC’s Innovation Advisory Committee holds its inaugural meeting on August 20, the same week the courts are working through whether federal law shields these contracts from state gambling statutes.
Event contracts were Robinhood’s second-biggest trading line in Q2, ahead of equities and crypto but still well behind options. Source: Robinhood Q2 2026 10-Q · Chart: FinanceFeedsWhat Event Contracts Overtook
The comparison that matters is inside transaction-based revenue, the fees Robinhood earns from trading activity. In Q2, options led at $342 million, event contracts came second at $156 million, equities followed at $129 million, and cryptocurrencies brought $100 million.
Event contracts made up about 20% of transaction revenue and roughly 12% of Robinhood’s total net revenue of $1.31 billion, which also includes a $389 million net-interest line that remains larger than any single trading product. So prediction markets are not yet Robinhood’s biggest source of money overall, but within trading they have vaulted past two of the businesses the company was built on.
Event-contract revenue was $10 million in the same quarter a year earlier, which makes this a roughly fifteenfold increase, and Robinhood describes prediction markets as the fastest-growing product line in its history. Crypto, by contrast, fell 38% year over year to $100 million, a slide FinanceFeeds detailed when Robinhood’s July crypto volumes dropped sharply. Prediction markets did not just grow; they grew as an older engine cooled.
A year ago, event contracts brought Robinhood $10 million. In Q2 2026 they brought in $156 million. Source: Robinhood Q2 2026 10-Q · Chart: FinanceFeedsInvestor Takeaway
Event contracts are Robinhood’s No. 2 trading line at $156 million but not its biggest revenue source overall, since net interest income is larger, so the line is a growth story rather than the company’s core earnings engine.
How the Robinhood Contracts Are Structured
Robinhood does not run the markets itself. It offers event contracts through Robinhood Derivatives, LLC, routing trades to exchanges operated by KalshiEX LLC, ForecastEX, LLC, or its own Rothera venture. That last piece matters: Robinhood has been building its own regulated infrastructure, acquiring the CFTC-licensed MIAX derivatives exchange through a joint venture with Susquehanna that closed in January, which gives it a licensed exchange and clearinghouse of its own rather than pure reliance on third parties.
Deliberately, contracts cleared through CFTC-licensed venues are, in Robinhood’s argument, federally regulated derivatives, and federal regulation is the shield the entire business now leans on.
The Legal Exposure Sitting Under the Line
The 10-Q lays out a dense web of litigation, and it clarifies exactly where the risk sits. Robinhood faces gambling-loss recovery suits in six states, brought under centuries-old “Statute of Anne” gambling statutes, and separate racketeering suits from tribal plaintiffs alleging the sports contracts are unlawful gambling; one such RICO claim against Robinhood was dismissed in May. In parallel, Robinhood has gone on offense, filing its own suits seeking to block enforcement of state gaming laws in Nevada, New Jersey, Massachusetts, Michigan, and Washington.
The CFTC has sued state authorities, arguing that the Commodity Exchange Act overrides state gambling law where federally regulated event contracts are concerned, and Robinhood has moved to intervene as a plaintiff in the CFTC’s Connecticut case. The theory is winning so far: in April, the Third Circuit ruled for Kalshi on the same preemption argument. But it is not settled everywhere, as FinanceFeeds reported when a Washington court barred Kalshi from sports, election, and political markets, and the broader scrutiny keeps widening, with a New York City Council probe into Polymarket, Kalshi, and others over their marketing.
What a Loss Would Cost
Rather than fight to the end there, Robinhood agreed to stop offering new sports-related event contracts in Nevada as of December 1, 2025, and to explore unwinding longer-dated ones in exchange for the state holding off enforcement during appeal. Multiply that across the states challenging these contracts, and the risk becomes clear: if preemption fails, Robinhood does not lose the whole $156 million at once, but it faces a patchwork in which its fastest-growing line is switched off market by market, starting with the lucrative sports contracts that drive much of the volume.
That is why this week matters more than the quarter did. The revenue line is already booked. What is unresolved is whether the legal framework that lets Robinhood keep booking it holds, and the CFTC’s own posture, on display first at Wednesday’s White House gathering and then at Thursday’s committee meeting, is the clearest near-term signal of which way Washington leans. HOOD shares, down about 5% on the week, per TradingView even with the prediction-market momentum, suggest the market is weighing both sides at once.
Investor Takeaway
The whole business rests on federal preemption of state gambling law, and while the Third Circuit’s April ruling for Kalshi favors Robinhood, the question is not settled nationally, so the legal outcome is the single largest swing factor on this line.