Robinhood Launches Prediction Market 'Custom Combos'

Robinhood has officially rolled out Custom Combos for its prediction market users, introducing a new way to bundle multiple event contracts into a single trade. The feature allows traders to combine their predictions on various outcomes, creating a unified position that pays out only if all selected events occur as anticipated.

This move represents a significant expansion of the platform's prediction market offerings, which have grown rapidly since their introduction. By enabling users to construct their own combinations of contracts, Robinhood is catering to traders looking for more complex strategies and potentially higher payouts, all within a regulated financial framework.

The new Custom Combos feature operates on a straightforward principle: users select two or more individual event contracts and link them together. If a trader believes that a specific political outcome will occur alongside a particular economic indicator, they can now bundle those predictions into one trade. The success of the combo is contingent on every included event resolving in the user's favor.

While the mechanics are similar to traditional sports betting parlays, Robinhood and industry participants emphasize that these are distinct financial instruments. The company has explicitly requested that users avoid using the term "parlays" when referring to these products, highlighting their classification as event contracts rather than wagers. This distinction is crucial for regulatory clarity and market positioning.

Key aspects of the feature include:

• Flexible selection of multiple underlying events
• Single transaction for all bundled contracts
• Payout structure based on combined probability
• Clear distinction from traditional sports betting terminology

Robinhood's expansion into more complex prediction market products comes during a period of explosive growth for the sector. The broader market has seen a dramatic shift toward sports-related contracts, which have captured the majority of trading activity. This trend underscores the strong consumer demand for accessible, regulated platforms to engage with sports and event outcomes.

Recent data highlights the dominance of sports contracts within the prediction market ecosystem. On the Kalshi platform, a major player in the space, sports contracts recently accounted for a staggering 91% of total trading volume. This concentration of activity demonstrates that while prediction markets cover a wide array of topics—from politics to economics—sports events remain the primary driver of user engagement and liquidity.

Sports contracts recently accounted for 91% of trading volume on Kalshi.

The rapid adoption of these markets reflects a broader shift in how individuals interact with financial products related to real-world events. Platforms are increasingly offering tools that blend analytical trading with speculative interest in sports and current affairs, creating a hybrid category that appeals to a diverse audience.

The introduction of Custom Combos navigates a complex regulatory landscape. Prediction markets operate under different rules than traditional sportsbooks, often falling under the purview of the Commodity Futures Trading Commission (CFTC) in the United States. By framing these products as event contracts, platforms like Robinhood and Kalshi maintain a distinct regulatory classification.

This distinction is not merely semantic; it affects how products are marketed, who can trade them, and how they are taxed. The push to differentiate features like Custom Combos from "parlays" is a strategic move to reinforce their identity as financial instruments rather than gambling products. This approach aims to appeal to a user base interested in market analysis and trading strategies.

The market's trajectory suggests continued innovation in this space. As user bases grow and demand for more sophisticated products increases, platforms are likely to introduce further variations on bundled contracts and complex trading strategies. The success of sports-focused contracts indicates a fertile ground for expansion into other high-interest event categories.

For individual traders, the launch of Custom Combos offers a new tool for portfolio diversification and speculative strategies. The ability to combine multiple predictions into a single trade allows for more nuanced positions that reflect a trader's holistic view of interconnected events. This can potentially lead to higher returns, though it also introduces the compounded risk of all selected events needing to succeed.

However, traders should approach these products with a clear understanding of their mechanics and risks. Combining multiple event contracts increases complexity, and the all-or-nothing nature of a combo trade means that a single incorrect prediction results in a total loss of the position. Education on how these financial instruments function is essential for anyone looking to engage with them.

As the prediction market landscape evolves, the tools available to retail traders are becoming increasingly sophisticated. Robinhood's Custom Combos represent a step toward more advanced trading capabilities, blurring the lines between traditional financial markets and the growing interest in event-based speculation.

The rollout of Custom Combos signals a maturation of the prediction market industry, moving beyond simple single-event contracts toward more complex, user-driven products. This innovation is likely to spur further development from competitors, potentially leading to an even wider array of bundled trading options in the near future.

As regulatory frameworks continue to adapt and user adoption grows, the integration of event contracts into mainstream trading platforms appears set to expand. The success of this feature will be a key indicator of the market's appetite for more sophisticated, risk-managed speculative tools that bridge the gap between financial trading and interest in real-world outcomes.