Cathie Wood’s Ark Invest praises Robinhood’s foray into prediction markets

Cathie Wood's Ark Invest is optimistic that Robinhood's latest move to prediction markets will help advance the convergence of sports and financial trading.

Last week, on August 19, Robinhood announced a deal with prediction market platform Kalshi to offer event contracts tied to professional and college football games.

Unlike sportsbooks, those contracts are subject to regulation of the Commodity Futures Trading Commission (CFTC), which means that users won't have to deal with a patchwork of state gambling laws.

These products exist as federally regulated financial instruments and give Robinhood major distribution advantages over the competition.

In Ark Invest's newsletter, Nick Grous, the Director of Research for Consumer Internet and Fintech at Ark Invest, noted that Robinhood differs fundamentally from DraftKings and other sportsbooks.

Robinhood operates with a straightforward, flat fee of $0.02 per trade, with outcomes determined based on market probabilities.

Whereas sportsbooks add margins, referred to as "vig," with odds typically having a margin of between 4-6%. This means bettors will need a win rate of 52-55% just to break even.

DraftKings has regulatory approvals across 25 states and Washington, D.C., for each state, which complicates swift expansion.

Robinhood can more easily scale due to its prediction product being anchored to federally regulated markets with fewer friction points, believes Ark Invest.

Ark Invest also believes this will provide a low-cost, federally compliant way for investors and consumers to think differently about the intersection between sports and markets.

By recasting betting as trading, Robinhood will appeal to sports enthusiasts and any market participants who might be looking for an emerging asset class.

Ark Invest's enthusiastic results illustrate their longer-standing thesis that Robinhood will produce outcomes that expand retail access to financial markets.

After the deal with Kalshi was finalised Robinhood's stock (HOOD) price increased by 8%, as per reports. However, at press time, HOOD is trading at $108, down 1.31% over the last day.

This story was originally reported by TheStreet on Aug 26, 2025, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.

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