Robinhood Prediction Markets Entry Threatens DraftKings, FanDuel, Says Analyst
Posted on: December 15, 2025, 05:11h.
Last updated on: December 15, 2025, 05:11h.
- Robinhood plans to unveil its prediction market platform at a Dec. 16 investor event.
- Company could highlight less dependence on Kalshi.
- Analyst says competitive threat to sportsbook operators could be emerging.
On Tuesday, Robinhood Markets (NASDAQ: HOOD) is hosting Robinhood Presents: YES/NO, an event at which the brokerage firm will unveil its prediction markets platform. The event could send shockwaves throughout the sports betting industry, says an analyst.
Bank of America analyst Julie Hoover, who covers Robinhood, said in a note to clients today that among the revelations that could emerge from the Dec. 16 event are the trading house signaling to investors and customers that it’s less dependent on Kalshi for event contracts.
That’s a distinct, though unconfirmed possibility because Robinhood announced last month that it’s partnering with market maker Susquehanna International Group on what amounts to be an organic prediction markets offering. The company behind the ubiquitous trading app has maintained that it will maintain a relationship with Kalshi.
Robinhood has been featuring Kalshi event contracts on its trading platform with the two companies evenly splitting the economics, but with the former accounting for 25% to 35% of the former’s volume and with prediction markets representing one of Robinhood’s fastest-growing segments, it may be incentivized to scale back the Kalshi relationship.
Not Necessarily Good News for DraftKings, FanDuel
Bank of America’s Hoover points out that the current sentiment in the sports betting industry indicates that bad news for Kalshi is positive for entrenched operators, but that perspective may be misguided.
From our conversations, it seems like online sports betting investors are viewing any negative for Kalshi as a positive for OSB operators, but we think a large tech company such as HOOD investing more in the space is a competitive threat to DraftKings and FanDuel,” observes the analyst.
FanDuel, a unit of Flutter Entertainment (NYSE: FLUT), and DraftKings are the two largest US sportsbook operators and both are getting into the prediction markets space. FanDuel is already there and an equivalent DraftKings offering is expected to soon go live.
That says the sports betting giants aren’t taking the prediction markets threat lying down, but Hoover says the sports betting landscape could be dramatically altered by Robinhood’s prediction markets push. By market value, the financial services firm is bigger than every publicly traded gaming company and with nearly $23 billion in cash on hand, it has the resources with which to disrupt sports betting via its prediction market ambitions.
Focus on Fees
Something else to watch for at the Robinhood prediction markets event is how competitive the company plans to be with Kalshi and Polymarket on event contract fees. Across the yes/no contracts landscape, fee compression is a marquee issue because, outside of Illinois, sportsbook operators don’t charge per bet fees. The ability of prediction exchanges to keep fees as customer-friendly as possible is also relevant because the industry is widely expected to be less promotion-intensive than sports betting.
Even with the possibility of an event contracts fee war, some market observers believe prediction markets are on pace to exponentially grow revenue over the next several years.
As the prediction markets space grows, operators may be able to keep fees low if more institutional investors enter the market. Analysts see prediction markets as ripe for increased participation among professional investors because yes/no derivatives provide avenues for hedging legal, macroeconomic, and regulatory risks.
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