Robinhood's Prediction Markets Surpass Stock Trading Fees for First Time

Robinhood's prediction markets have surpassed stock and crypto trading fees for the first time, generating $156 million in revenue during the second quarter. This milestone comes as the company continues to expand its platform, with event contracts becoming its second-largest trading business after options.

The segment saw a 50% increase in fees from the previous quarter, while customer wagers on event contracts rose by roughly 55%. Robinhood's CEO Vlad Tenev described the World Cup-driven activity as 'really a proof of concept' for the company's regulated exchange and clearinghouse, Rothera.

The platform is expected to scale rapidly, with Tenev pointing to upcoming events such as the football season and midterm elections as potential drivers of future trading. Robinhood has reduced commissions on prediction-market bets in its pursuit of market share, and nearly 2 million people have now used its prediction markets, up from about 1.5 million at the company's prior update.

The strong performance of Robinhood's prediction markets contributed to the company's net income of $573 million, or $0.62 per share. Excluding an accounting change related to the company relinquishing control of its venture fund, earnings were $0.48 per share, above the $0.45 per share forecast by analysts.