Prediction Markets Heat Up: Robinhood's Parlay Launch Signals Arms Race Among Trading Platforms

Source: Blockworks Original Title: Robinhood’s leap shows the prediction-market arms race is underway Original Link: https://blockworks.co/news/robinhoods-leap-shows-the-prediction-market-arms-race-is-underway

Market Overview

Markets closed with a clear risk-off tone yesterday. Gold finished up 0.8%, while the S&P 500 ended flat and the Nasdaq and BTC fell -1.38% and -1.89%, respectively. The underlying drivers remain unchanged, with continued rotation out of the AI trade weighing on tech-heavy indices.

Weakness spilled into crypto, with every sector finishing in the red. The hardest-hit sectors were Crypto Miners and AI, both down close to -9%. Despite the negative market sentiment, BTC ETFs have flipped positive once again and notched $346.1 million worth of inflows.

Prediction Markets: The Next Frontier

Prediction markets have become increasingly central to the cryptocurrency and trading ecosystem. Recent developments show explosive growth, with prediction markets now accounting for significant trading volumes across major platforms.

Sports continue to be the clear driver, accounting for about 35% of volumes on certain major platforms and close to 90% on others. When annualized, sports volumes across leading platforms reach roughly $74.5 billion—directly competing with established Web2 sports betting incumbents.

The Parlay Game-Changer

The critical missing piece has been parlays, which make up roughly 30% of sports-betting volumes and nearly 60% of industry revenues. These bundle multiple wagers into a single bet, offering higher payouts but lower odds of winning—precisely why they are so lucrative for platforms.

Robinhood is now moving aggressively into this territory. The platform announced that users will soon be able to trade combinations of outcomes, totals and spreads for individual NFL games. Looking ahead to early 2026, users will be able to create custom combinations of up to 10 outcomes. Robinhood will also allow trading on individual player performance, opening the door to far more speculation and volume.

The Arms Race

The remaining question is how platforms choose to build. Robinhood announced plans to build proprietary prediction market infrastructure through a joint venture with Susquehanna International Group. Meanwhile, other major platforms are also entering the space with new partnerships and features.

Sports markets have found clear product-market fit this year. With distribution at scale and increasingly sophisticated products, these latest moves could give market leaders a meaningful edge in capturing trading volume and user growth throughout 2026.