Robinhood offers “custom combos” for predictive markets, but don’t call them Parlays

Robinhood is enabling “Custom Combos” for users betting on professional football, underscoring efforts to expand its prediction market offering as gambling increases 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 said this Declutter that custom combos and parlays are different, with the main difference coming down to Kalshi’s role in facilitating cross-contract betting that can combine up to 10 different predictions. Robinhood partnered with Kalshi this summer for college and pro football prediction markets.

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

When Kalshi issues a quote request on its platform, market makers anonymously submit quotes to choose the other side of a user’s bet and the user is shown the best available price. The spokesperson noted that the quote requests are available to everyone through Kalshi’s API. That process requires more technical knowledge than browsing an app from the couch.

“Conceptually they are similar, but the way the contracts work is completely different,” the Robinhood spokesperson said. “Unlike the house that unilaterally determines its odds, any participant in a prediction market can submit a quote to accept the other side of a quote request.”

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

Robinhood shares were little changed at $110 on Friday, according to Yahoo Finance. The company’s share price is up 140% in the past year.

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

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

Robinhood’s use of the term signals tension building in US courtrooms over how to regulate prediction markets. Although companies like Kalshi claim to provide financial tools for information discovery – under the purview of the CFTC – critics and states argue that the platforms resemble subtly disguised casinos subject to local laws.

The Robinhood spokesperson said Custom Combos are available in every US state except Maryland and Nevada, where access to prediction markets is limited.

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 company charges a one-cent fee per contract traded on its Kalshi-powered prediction markets.

Last week, Kalshi generated $1.8 billion in trading volume from the sports markets, which accounted for 91% of the platform’s activity, according to a Dune dashboard. In the same period a year ago, Kalshi did not generate any trading volume from the sports markets.

“At what point do we agree that you are no longer a ‘prediction market?’” one user on The message was viewed more than 500,000 times.

Parlays are becoming increasingly popular among those who bet on sports in the US, according to a study published in July by the National Council on Problem Gambling. As of 2024, 30% of Americans will bet on sports via parlays, almost doubling from 17% in 2018.

The increase raises “concerns about loss-seeking behavior,” the NCPG added, with gamblers stacking multiple legs on top of each other in the hope of a bigger payout.