Piper Sandler predicts a substantial boost for Robinhood’s prediction market revenue as the football season approaches. This optimism stems from the success of prediction markets during the World Cup and the recent launch of Rothera, a joint venture with Susquehanna, which has gained CFTC approval for football-related contracts.
Analyst Patrick Moley estimates a significant portion of prediction market volume has already shifted to Rothera from competitors like Kalshi, projecting strong performance for Robinhood in the upcoming quarters.
Robinhood (HOOD) is set to experience a significant uplift in its prediction market revenue with the commencement of the football season next week. Piper Sandler analysts highlighted this potential surge in a note released Wednesday, anticipating strong performance driven by increased user engagement.
The excitement surrounding the World Cup earlier this summer demonstrated the explosive growth potential of prediction markets. Piper Sandler analyst Patrick Moley views these strong World Cup volumes as a key indicator for what's to come during the upcoming NFL and NCAA Football seasons, predicting they will act as a major catalyst for Robinhood's prediction market revenue in the third and fourth quarters of 2026.
Rothera, a joint venture between Robinhood and Susquehanna that launched in June, is a derivatives exchange and clearinghouse regulated by the Commodity Futures Trading Commission (CFTC). The firm's positive outlook is reinforced by Robinhood management's confirmation that Rothera has received CFTC approval to offer football contracts, including those related to wins and point spreads.
In light of these developments, Moley has revised his earnings per share estimates for Robinhood, increasing the 2026 forecast by 5% and the 2027 forecast by 7%. He also raised his price target for the stock to $145 from $135, signaling a potential upside of approximately 35% from Wednesday's closing price. The analyst maintained his 'overweight' rating on Robinhood shares.
Step Aside, Kalshi
Piper Sandler's analysis suggests a significant shift in prediction market volume away from Kalshi towards Robinhood's own platform, Rothera. Moley estimates that approximately 23% of prediction market volume has transitioned to Rothera from Kalshi since Rothera's launch in June.
"Robinhood's shift to Rothera has accelerated the decline in its share of Kalshi's volumes," Moley noted. "Last year during football season, HOOD users made up between 22% and 30% of all volume traded on Kalshi, a share that has decreased to the mid-single digits behind Kalshi's quest to acquire more of its own users."
Between June and August, Robinhood experienced an 88% increase in average monthly prediction market volumes compared to the January-May period, largely attributed to strong engagement during the World Cup. To project Robinhood's prediction market revenue for the latter half of the year, Piper Sandler utilized Kalshi's historical performance as a benchmark.
The firm's analysts project that from September through December, Robinhood users will trade an estimated 29.7 billion event contracts, generating approximately $320 million in revenue, which equates to an annualized revenue of $960 million.
Football's Evolving Dominance on Kalshi
In the 2025 season, football constituted 42% of Kalshi's total trading volume, with NFL and NCAAF trading accounting for roughly $14 billion. However, Moley anticipates that football-related contracts will not dominate Kalshi's total volume as significantly this season due to a broader diversification of contract offerings beyond major sports.
"Major sports made up just 54% of Kalshi's mix in August 2026, down sharply from a high of 83% in November 2025," the note indicated.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
