Robinhood earnings release puts prediction market growth under scrutiny

Bernstein analyst Gautam Chhugani published his forecast before US markets closed on October 27: Robinhood Markets would generate $1.7 billion in prediction market revenue by 2028, edging past $1.6 billion in projected cryptocurrency income in the same year. That ordering matters. For the first time in the company's history, event contracts have become the headline growth story.

Robinhood's third-quarter earnings, released after close on October 27, are the first live test of that thesis. Chhugani's model requires event contract revenue to roughly double from his $650 million estimate for 2026. The second quarter already showed prediction markets exceeding crypto revenue on a quarterly basis. Whether that holds across a full calendar year, and at what margin, is what the earnings release will either confirm or complicate.

My read is that Chhugani's number is real but the path to it is narrower than the headline suggests. The risk is not the 2028 target. It is the dependency structure underneath it.

Prediction market revenue at Robinhood is not yet a diversified book. The contracts that drove second-quarter outperformance were concentrated around US political events — a category that is inherently episodic. A platform built on election volume faces the same problem every election cycle ends: there is no election for eleven months, and the customers who came for the election may not stay for Fed rate decisions and college admissions contracts. Chhugani's model implicitly assumes Robinhood converts those customers into habitual users of a broader contract menu. That conversion has not yet been demonstrated at scale.

The Coinbase comparison sharpens this. Chhugani projects $2 billion for Coinbase in event contracts and derivatives by 2028, up from $600 million this year. Coinbase's path runs partly through perpetual futures — instruments with continuous demand that do not depend on a discrete event calendar. Robinhood's path runs through event contracts proper, which do. The instruments are structurally different in their revenue rhythm, and treating them as comparable growth stories elides that difference.

The regulatory architecture compounds the uncertainty. Under the Commodity Exchange Act, event contracts on Designated Contract Markets are subject to CFTC oversight, and the agency's position on which contracts qualify — and which cross into prohibited activity under 7 U.S.C. § 7a-3 — remains contested in active litigation. A ruling that narrows the permissible contract universe would fall disproportionately on platforms whose growth thesis depends on expanding that universe rapidly. Whether Robinhood has priced that risk into its product pipeline is not on the public record.

Chhugani raised his overall Robinhood revenue estimates by three to four percent across the forecast window, which is a calibration, not a revision. He believes the direction but is adjusting the magnitude as data arrives. That is the appropriate posture given what is still unknown.

The earnings release on October 27 will show whether third-quarter event contract revenue maintained its pace above crypto, and whether Robinhood's user retention outside election windows is running ahead of or behind the model's assumptions. Those two figures will do more to validate or stress the 2028 projection than any analyst report.