Robinhood Made $173M From Bets Last Quarter and $120M From Crypto. The Same Day, Washington Sued a 10th State to Keep the Bets Legal

Robinhood built its brand on letting retail buy Dogecoin at 3am. Its Q3 2026 numbers, released October 27, show where that crowd has gone:

• Event contracts (prediction markets): $173 million, up more than 6x year over year
• Crypto: $120 million, down 55% year over year

That’s the second quarter in a row bets have out-earned crypto at Robinhood. In Q2, event contracts brought in $156M and crypto about $100M.

On the same Tuesday, the CFTC filed suit against Utah, the tenth state it has taken to court to defend those bets. Utah had sued Kalshi a week earlier. Kalshi is one of the exchanges Robinhood routes event contracts through. Utah also sued Susquehanna, which co-owns Robinhood’s in-house prediction exchange.

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The Robinhood Numbers

Q3 2026	Revenue	Change YoY
Total net revenue	$1.42B (record)	+12%
Transaction-based revenue	$867M	+19%
Options	$399M	+31%
Event contracts	$173M	6x+
Equities	$121M	+41%
Cryptocurrencies	$120M	−55%

Sources: Robinhood Q3 2026 release, CNBC.

Some more context:

• Crypto was the only major transaction line that shrank year over year. Crypto notional volume fell 38% to about $50 billion, per KuCoin’s summary of the report.
• Crypto did recover a little from Q2, rising about 20% quarter over quarter, and The Block reports that Robinhood Chain brought in about $26 million.
• Net income fell to $468M from $556M a year earlier. Shares dropped about 4% after hours (CNBC).

Prediction markets grew from about $104M in Q1 to $156M in Q2 to $173M in Q3. That makes them Robinhood’s second-largest transaction line, behind only options.

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Who Robinhood’s Bets Run Through

Robinhood’s broker doesn’t run the contracts itself. It routes them to outside exchanges:

• KalshiEX, its original partner, which used to take every contract Robinhood sent
• ForecastEX
• Rothera Exchange and Clearing, the former MIAXdx. Robinhood and Susquehanna International Group bought 90% of it and started routing contracts there on June 4, 2026

That routing is why the Utah case matters so much to Robinhood.

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Utah Calls It a “Back-Alley Gambling Den”

On October 20, Utah Attorney General Derek Brown sued in state court in Salt Lake City (Utah News Dispatch, Deseret News):

• Defendants: several Kalshi entities, plus Susquehanna International Group and Susquehanna Government Products, which Utah accuses of keeping the wagering going as market makers
• Theory: the Utah Constitution bars the legislature from authorizing gambling, and Brown declared the activity a “public nuisance that is causing substantial ongoing harm”
• Money: Utah estimates Kalshi collected $30.6M to $61.2M in fees from Utah-linked accounts through October 19. That’s the state’s estimate, and no court has ruled on it
• Ask: an injunction, restitution and damages

Utah has already won once. In August, a federal judge ruled that the Commodity Exchange Act doesn’t stop Utah from enforcing its gambling laws against Kalshi. Kalshi is appealing. Kalshi’s position is that it is a federally regulated exchange, “like the stock market.”

Utah sued Susquehanna for its role as a Kalshi market maker, not over Rothera. But Susquehanna is also Robinhood’s partner in the exchange Robinhood is moving its betting volume onto, so the case reaches past Kalshi.

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Washington Sues Back

On October 27, the CFTC sued the State of Utah and AG Brown in the U.S. District Court for the District of Utah (CFTC release 9315-26, The Block). The agency argues the Commodity Exchange Act gives it exclusive authority over event contracts listed on federally regulated exchanges, and it wants Utah’s laws declared invalid as applied to them.

Chairman Michael Selig:

“Utah seeks to shut down prediction markets across a wide variety of markets.”

“Congress entrusted the CFTC to be the federal regulator with sole responsibility to oversee these markets.”

The CFTC has now sued 10 states: Arizona, Connecticut, Illinois, New York, Wisconsin, Minnesota, Rhode Island, New Mexico, Kentucky and Utah. When we covered the first wave in June, the count was 8.

Also on Tuesday, Reuters reported that the CFTC is investigating Polymarket over whether it broke its 2022 settlement, which required it to stop serving US users (via The Block). So the regulator is defending event contracts in court against the states while investigating the biggest offshore venue.

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The Real Risk

Robinhood’s fastest-growing transaction line now depends on how courts rule in these cases, and the results so far point both ways:

• A federal judge has already sided with Utah on preemption, with the appeal still pending
• The CFTC is suing state after state, and each new suit is another chance for a court to rule against it
• Earlier coverage noted that much of the growth came from one-off events, including the World Cup and the midterms

If a few large states make their bans stick, Robinhood could lose much of the line that has been making up for the crypto slump. If the CFTC wins on preemption, event contracts will most likely keep outgrowing crypto at every US retail broker.

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Why This Matters for Crypto Jobs

Retail money is following the product, and hiring will follow the money. Robinhood is the clearest case: event contracts are up 6x and crypto is down 55%. Expect broker headcount to shift the same way.

• Prediction-market engineering is a real job category now. Matching engines, clearing, market-making systems, pricing for sports and election events, and oracle/settlement pipelines. Rothera, Kalshi, ForecastEX and Polymarket’s US effort all need people who’ve built exchange infrastructure, and crypto exchange engineers already have it.
• Regulatory work is growing fastest. Ten federal suits, state-court cases and a CFTC investigation of Polymarket all need lawyers and compliance staff who understand both the CEA and state gambling law. Few people have both.
• Crypto teams at retail brokers are on watch. When a line falls 55% while the one next to it grows 6x, budgets move. Robinhood Chain’s $26M shows there’s still money in onchain products, but retail spot trading is no longer where the growth is.
• Market makers are now legal targets. Utah naming Susquehanna as a defendant is a warning for every trading firm quoting event contracts. Risk and legal roles at prop shops will grow with it.

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The Bottom Line

Robinhood, the brokerage best known for retail crypto trading, now earns 44% more from event contracts than from crypto. On the day it reported that, the CFTC went to court against a tenth state to keep those contracts legal. Whether the federal government or the states get to decide this is still open, and a lot of Robinhood’s revenue depends on the answer.

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