Is the World Cup just an "appetizer"? Robinhood (HOOD.US) receives CFTC approval to launch soccer contracts, and Piper Sandler predicts that market revenue is expected to explode in growth.

Piper Sandler indicated in a research report on Wednesday that with the NFL season officially kicking off next week, Robinhood (HOOD.US) is expected to see significant growth in its prediction markets revenue. This summer, the World Cup has brought explosive trading volume growth to prediction markets. Analyst Patrick Moley believes this momentum serves as a leading indicator for a strong performance in the football season. Considering that both Kalshi and Robinhood's user bases are primarily in the U.S., where soccer is far more popular than English football, we view the explosive trading volume during the World Cup as a leading indicator for future trendsthe NFL and NCAA football seasons will become important catalysts for Robinhood's prediction market revenue in the third and fourth quarters of 2026. The proprietary platform Rothera has been approved by the CFTC. The prediction market platform Rothera, jointly established by Robinhood and Susquehanna, officially launched in June this year. This platform operates as a derivatives exchange and clearinghouse regulated by the U.S. Commodity Futures Trading Commission (CFTC). Piper Sandler pointed out that Robinhood management has confirmed that Rothera has received CFTC approval to offer contracts covering wins, losses, and betting lines for football. Based on this, Moley has raised Robinhoods earnings per share forecasts for 2026 and 2027 by 5% and 7% respectively, and increased the target stock price from $135 to $145, indicating about a 35% upside from Wednesday's closing price. He also reaffirmed an overweight rating on the stock. Flow accelerating from Kalshi Although Robinhood is still showcasing Kalshi's market to users, Moley estimates that since June, approximately 23% of prediction market trading volume has shifted from Kalshi to Rothera. Robinhood's migration to Rothera has accelerated its decline in market share in Kalshis trading volume, Moley wrote in the report. During last year's football season, Robinhood users accounted for 22% to 30% of Kalshi's total trading volume, but this proportion has now dropped to the mid-single digits, as Kalshi is also actively attracting its own users. Additionally, driven by the strong participation in the World Cup, Robinhood's average monthly prediction market trading volume from June to August rose by 88% compared to January to May. Revenue forecast for the second half: approximately $320 million. Piper Sandler made predictions for Robinhood's prediction market revenue for the second half of the year based on Kalshi as a reference. The firm expects that from September to December this year, Robinhood users will trade approximately 29.7 billion event contracts, generating around $320 million in revenue, which translates to an annualized revenue of approximately $960 million. Piper Sandler found that in the 2025 season, football-related contracts accounted for 42% of Kalshi's total trading volume, with NFL and NCAAF trading volume totaling about $14 billion. However, Moley expects that since Kalshi has expanded into various contract categories beyond mainstream sports, football contracts are not likely to dominate total trading volume as they did last year. By August 2026, the share of mainstream sports in Kalshi's product mix has dropped to 54%, significantly down from 83% in November 2025.