Robinhood Sports Prediction Markets (How Does it Work?)

You’ve probably heard about the sports prediction markets on the Robinhood app, and you’re wondering how it works. Well, we’ll explain everything in this guide.

The trading app supports prediction markets where you buy and sell event contracts based on possible outcomes. So, it’s not a sportsbook with fixed odds. Keep reading to learn more about Robinhood’s sports prediction markets. We’ll explain the supported sports, pricing pattern, and potential payouts, among other details.

The fact about the Robinhood sports prediction platform

To set things straight, Robinhood is a trading app, so when you sign up, you can only buy and sell. Consequently, the platform doesn’t list odds. It only features sports prediction markets, allowing you to trade event contracts on different outcomes.

The Robinhood event contracts are financial derivatives. You can buy Yes or No contracts on different sports events based on what you think will happen. In an NFL game, for instance, buying Yes contracts for a particular team means you believe they’ll win. If you think otherwise, you buy No, or Yes for their opponent.

After buying, you may choose to sell at any time, especially if the contract price moves in your favor. You don’t always have to wait until the match is over.

How Robinhood sports event contracts work

Each sports event contract on the Robinhood app costs between $0.01 and $0.99. Importantly, the trading platform doesn’t set this price. Instead, it depends on supply and demand as traders buy and sell because the prediction markets are peer-to-peer (P2P).

In our Robinhood prediction markets review, we saw the following prices for an NBA game between the Pacers vs the Nuggets:

The above rates show that more traders are purchasing Yes event contracts for the Nuggets to win. That’s why the price is $0.76, and it simply means the market believes there’s a 76% chance of the prediction becoming true. If the Yes contract sees more buys, the price can increase to maybe $0.86, while that of the Pacers will reduce to $0.15.

As you can see, Robinhood doesn’t set the price. Since it’s a P2P market, there has to be someone ready to sell a Yes/No contract if you want to buy, and vice versa. Robinhood will only match the orders for the trade to happen.

Are Robinhood sports prediction markets legal?

The answer is yes since the platform is regulated in the US. Robinhood offers sports prediction markets through Robinhood Derivatives, LLC, which operates under oversight by the Commodity Futures Trading Commission (CFTC). Approval from the CFTC means Robinhood can operate as a prediction market site across the US.

However, we found some limitations in our review. Traders in Maryland and Nevada can’t access sports prediction markets on Robinhood. If you’re in Nevada, you can still trade event contracts for other categories like politics, culture, and economics.

Available Robinhood sports markets

You can purchase event contracts across 10+ sports on the Robinhood app. Here’s the list we saw during our review:

1. NFL
2. NCAAF
3. NBA
4. NCAAB
5. NHL
6. MLB
7. Boxing
8. Racing (Formula 1)
9. Soccer
10. Golf
11. Esports

Although it’s not a long list, the above options are pretty standard among prediction market sites. We commend Robinhood for featuring the most popular sports in the US, including pro and college leagues.

Supported prediction options

For top sports, Robinhood supports the three major prediction options: Winner, Spread, and Totals. Therefore, you buy Yes/No contracts for teams to win outright or based on an applied spread. You can also trade contracts to predict if the total points scored will be over or under a set amount.

On the Robinhood app, we saw more interesting prediction options, such as:

The above options place Robinhood among our best prediction market sites in the US. If you want more than sports, you can check out the culture, politics, and economics prediction markets, among others. In politics, for instance, you trade Yes/No event contracts relating to election results. The Robinhood election prediction markets are particularly popular.

Easy sports prediction trading on Robinhood

Predict event outcomes on Robinhood

Robinhood payouts for sports event contracts 

Robinhood has a fixed $1 payout for any event contract with a correct prediction. However, if the prediction is incorrect, the return is $0.00, and the event contract becomes worthless.

Recall that the contract price ranges from $0.01 to $0.99. So, if you purchase 100 contracts for a sports event at $0.50 each, you’ll spend $50. When the game is over, and your prediction is correct, you receive a $100 payout, indicating a $50 profit.

Since you’re trading, you can sell your contracts at any time. Let’s say you buy at $0.50 and the price appreciates to $0.70 because more traders are purchasing. In that case, you can sell early and get a $0.20 gain on each contract.

Similarly, traders may be dumping the contract, causing its price to fall to $0.30. This indicates the market believes that there is a lower chance of the outcome coming to pass. Instead of waiting for the events to settle against your favor and get $0.00, you can sell and minimize the loss. Or if you believe the market is wrong, you can buy more contracts as the price goes down.

Robinhood fees for trading sports event contracts

We consider Robinhood an affordable sports prediction market app for US traders. The platform only takes a minimal $0.01 commission when you buy or sell an event contract. Therefore, if you want to purchase a contract worth $0.70, you’ll pay $0.71.

In some cases, you may also pay an exchange fee. That’s because the sports event contracts on Robinhood are actually provided by Kalshi or ForecastEx. Nevertheless, the exchange fee is usually also $0.01, so even if it applies, the total charge is just $0.02.

Tips for trading Robinhood sports event contracts 

Trading event contracts on Robinhood require strategies. You’re using real money, and wrong predictions result in a loss. To help you trade better, these are our tips to follow:

1. Start with Winner, Spreads, and Totals before trying advanced options

2. Always watch the price movements to see how market sentiment changes

3. Research matchups, injuries, and recent performance to make better predictions

4. Consider taking profits early if your contract gains value

5. Manage your bankroll and avoid investing too much in one event

Our final takeaway is to trade responsibly and avoid emotional decisions.

Upsides and downsides of Robinhood sports prediction markets

Below are the pros and cons of the sports prediction markets offered by Robinhood:

Pros and Cons

• Regulated by the CFTC
• Covers all popular US sports
• Wide range of prediction options

• Unavailable in Maryland and Nevada

Conclusion – Join Robinhood and trade event contracts on top sports

To wrap up, Robinhood sports prediction markets that let you trade event contracts. The Yes/No format is easy to understand even if you’re new, and since the market is P2P, everything stays transparent. Robinhood doesn’t influence the contract prices in any way.

We can recommend Robinhood to any US trader looking for sports prediction markets. The platform supports all popular sports leagues, including the NFL, NCAA, NBA, MLB, and NHL. Also, it’s legal and regulated by the CFTC. The drawback is that traders in Maryland and Nevada can’t access the markets.

If you’re in an eligible state, you can try out Robinhood's sports prediction markets. To start trading, click the banners on this page to visit the site and register.

Robinhood sports prediction markets FAQs