Robinhood Offers Prediction Market ‘Custom Combos’—But Don’t Call Them Parlays

Robinhood is enabling “Custom Combos” for users wagering on professional football, underscoring efforts to flesh out its prediction market offering as gambling heats up in the U.S. alongside the NFL postseason, the company said Friday.

The contracts are regulated by the Commodity Futures Trading Commission and resemble parlays offered by traditional gaming companies Draft Kings and FanDuel, allowing users to predict the likelihood of multiple outcomes at once, including the performance of individual players.

However, a Robinhood spokesperson told Decrypt that Custom Combos and parlays are different, with the main difference boiling down to Kalshi’s role in facilitating wagers across contracts that can combine up to 10 different predictions. Robinhood partnered with Kalshi for prediction markets on college and professional football this summer.

Traditionally, the “house” sets the odds for a bettor’s parlay independently, but the payouts on Custom Combos are determined by so-called Requests For Quotes, or RFQs.

When Kalshi issues an RFQ on its platform, market makers anonymously submit quotes to take the other side of a user’s wager and the user is presented with the best available price. The spokesperson noted that the RFQs are available to anyone through Kalshi’s API. That process requires more technical knowledge than browsing an app from one’s couch.

“Conceptually they are similar, but the way the contracts work is entirely different,” the Robinhood spokesperson said. “Unlike the house that unilaterally sets its odds, any participant in a prediction market will be able to submit a quote to take the other side of an RFQ.”

Robinhood first unveiled Custom Combos at an event in mid-December, in which CEO Vlad Tenev said prediction markets would change “the future of finance and news.” A blog post noted prediction markets as Robinhood’s “fastest-growing product line by revenue ever.”

Robinhood shares were little changed on Friday at $110, according to Yahoo Finance. The company’s stock price has risen 140% over the past year.

Joe Maloney, senior vice president of strategic communications at the American Gaming Association, told Yahoo News earlier this week that the entire NFL postseason, leading up to the Super Bowl, is among the buzziest for bettors each year.

“The NFL really owns the betting calendar when it comes to big moments,” he said. “It’s just a reflection of increased confidence in legal sports wagering in this country and the popularity of the NFL, of football, and the excitement of the playoffs.”

Robinhood’s use of the term hints at tension brewing in courtrooms across the U.S. over how prediction markets should be regulated. Although companies like Kalshi argue that they provide financial instruments for information discovery—under the remit of the CFTC—critics and states argue that the platforms resemble delicately disguised casinos subject to local laws.

The Robinhood spokesperson said that Custom Combos are available in every U.S. state, except for Maryland and Nevada, where access to prediction markets is restricted.

In October, analysts at investment bank Compass Point wrote in a note that they had grown bullish on Robinhood, citing professional sports as a major tailwind for the retail brokerage that helped popularize day-trading and meme stocks through commission-free trading. The firm charges a one-cent fee per contract traded on its Kalshi-powered prediction markets.

As of this past week, Kalshi generated $1.8 billion in trading volume from markets on sports, which accounted for 91% of the platform’s activity, according to a Dune dashboard. During the same period a year ago, Kalshi didn’t generate any trading volume from markets on sports.

“At what point do we agree you’re no longer a ‘prediction market?’” a user on X mused earlier this week, while showing that sports comprised a leading 40% of volume on Polymarket. The post was viewed over 500,000 times.

Parlays are becoming increasingly popular among those betting on sports in the U.S., according to a survey released in July by the National Council on Problem Gambling. As of 2024, 30% of Americans wagered on sports through parlays, nearly doubling from 17% in 2018.

The increase raises “concerns about loss-chasing behaviors,” the NCPG added, with bettors stacking multiple legs on top of each other in hopes of a bigger payout.