---
title: "Robinhood has until October 16 to answer Ohio on the prediction markets that out-earned crypto"
description: "Ten operators, Robinhood among them, must confirm by October 16 that Ohioans can no longer trade sports event contracts. The CFTC's answer, proposed six days before the deadline: call event contracts swaps."
publisher: "The Inference"
section: "Policy"
published: 2026-10-11T19:16:50.480Z
modified: 2026-10-11T19:16:50.480Z
canonical: https://theinference.org/article/robinhood-has-until-october-16-to-answer-ohio-on-the-prediction-markets-that-out-earned-crypto
language: en
keywords: "Robinhood, Prediction Markets, Regulation, CFTC, Sports Betting"
---

# Robinhood has until October 16 to answer Ohio on the prediction markets that out-earned crypto

> Ten operators, Robinhood among them, must confirm by October 16 that Ohioans can no longer trade sports event contracts. The CFTC's answer, proposed six days before the deadline: call event contracts swaps.

## Friday, in writing, to Ohio

Ohio's governor and its casino regulator [sent cease-and-desist letters dated October 2](https://www.covers.com/industry/ohio-regulator-sends-cease-and-desist-notices-to-10-prediction-market-companies-oct-5-2026) to ten prediction-market operators, [Robinhood](https://theinference.org/markets/companies/robinhood) among them: stop offering sports event contracts to Ohioans, and confirm it in writing by October 16 [1]. The letters warn of civil penalties and fines equal to the money or value of property obtained, on products the state calls unlicensed bookmaking, a felony [1]. Ohio has form here; it fined Kalshi $5 million in April [1]. No public reply from Robinhood appears in the coverage of the letters.

## Michigan already wrote the exit

Robinhood has used this door before. Under [a court-approved September agreement with Michigan](https://www.covers.com/industry/robinhood-halting-sports-prediction-markets-in-michigan-amid-lawsuit-sept-10-2026), it stopped listing new sports contracts and closed every remaining customer position by October 9 [2]. [Coinbase](https://theinference.org/markets/companies/coinbase) took the same terms, [shutting its Michigan sports positions by October 10](https://www.playusa.com/news/coinbase-halts-sports-event-contracts-in-michigan/) [3]. Both deals preserve each side's legal arguments while the 6th US Circuit Court of Appeals hears the underlying appeals [3].

## The CFTC rereads the definition the court used

On October 9 the CFTC [proposed an interim final rule](https://www.briefs.co/news/cftc-proposes-treating-event-contracts-as-swaps/) classifying event contracts on sports, politics, culture and weather as swaps, effective on Federal Register publication with 30 days of comment [4]. That targets [the exact definition the 6th Circuit applied](https://theinference.org/article/robinhood-s-156-million-event-contract-quarter-rests-on-a-word-the-courts-keep-rewriting) on September 25, when it held that Kalshi's sports contracts are not swaps and that state gambling law survives the Commodity Exchange Act [1][3]. The 3rd Circuit read the law the other way in April, a federal judge in Illinois sided with Kalshi this month, and New Jersey's petition sits at the Supreme Court [3][5]. Robinhood is itself a named party in the 9th Circuit version of the fight, which ruled in August that state gambling law can reach Kalshi [3][6]. Better Markets' Benjamin Schiffrin puts the other side plainly: "Calling it an event contract does not magically transform it into a financial derivative" [4].

## The revenue is real, and the sports split is not disclosed

Prediction markets out-earned crypto inside Robinhood last quarter: [$156 million of revenue on 13.6 billion contracts, against $100 million from crypto](https://www.techtimes.com/articles/322137/20260729/prediction-markets-outpace-crypto-robinhood-hits-record-131b-revenue.htm) [6].

*Chart: **Robinhood's revenue hit a record $1.31B the quarter prediction markets out-earned crypto** Line chart of Robinhood's quarterly total net revenue from Q3 2024 to Q2 2026, rising from $0.64 billion to a record $1.31 billion.*

*Total net revenue by calendar quarter, US$ billions, as reported in Robinhood's SEC filings. [9]*

Sports is what users show up for. [Seventy percent of US prediction-market traders bet on games](https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/10/us-prediction-market-trades-are-predominantly-sports-based), against 36 percent on economic or financial outcomes and 33 percent on politics [7]. Only 10 percent of US internet adults have ever used a prediction market, and 44 percent have never heard of one [7].

*Chart: **Sports is the trade: 70% of prediction-market users bet on games** Bar chart of categories traded by US prediction-market users: sports 70%, economic or financial 36%, political 33%, news and entertainment 26%, other 11%.*

*Share of US prediction-market users who traded each category in the past year; Kagan Q3 2026 consumer survey. [7]*

Robinhood discloses no sports split for that $156 million, and chief executive Vlad Tenev [says crypto contracts already outpace sports on his platform](https://cryptobriefing.com/robinhood-crypto-prediction-markets-dominance/) [8]. If Ohio-style geofences spread, the cost lands on HOOD holders; if the swaps label survives the courts, it lands on state-licensed sportsbooks. Friday's paperwork is the next marker, and the verdicts arrive in Cincinnati and, most likely, Washington [3][5].

## Takeaway

Robinhood and nine other operators must tell Ohio in writing by October 16 that residents cannot trade sports event contracts, and the CFTC's proposed swaps rule, three circuit rulings and a possible Supreme Court petition will decide whether state gambling law or federal derivatives law governs a business that out-earned crypto at Robinhood last quarter.

## Sources

1. [Covers.com, Ohio Regulator Sends Cease-and-Desist Notices to 10 Prediction Market Companies, October 5, 2026](https://www.covers.com/industry/ohio-regulator-sends-cease-and-desist-notices-to-10-prediction-market-companies-oct-5-2026)
2. [Covers.com, Robinhood to Stop Offering Sports Markets in Michigan, September 10, 2026](https://www.covers.com/industry/robinhood-halting-sports-prediction-markets-in-michigan-amid-lawsuit-sept-10-2026)
3. [PlayUSA, Coinbase Halts Sports Event Contracts in Michigan as Appeals Loom, October 9, 2026](https://www.playusa.com/news/coinbase-halts-sports-event-contracts-in-michigan/)
4. [Market Briefs, CFTC Proposes Treating Event Contracts As Swaps, October 9, 2026](https://www.briefs.co/news/cftc-proposes-treating-event-contracts-as-swaps/)
5. [The Lines, Coinbase to Halt Sports Event Contracts in Michigan Tonight, October 9, 2026](https://www.thelines.com/prediction-markets/industry-news/coinbase-to-halt-sports-event-contracts-in-michigan-tonight/)
6. [TechTimes, Prediction Markets Outpace Crypto as Robinhood Hits Record $1.31B Revenue, July 29, 2026](https://www.techtimes.com/articles/322137/20260729/prediction-markets-outpace-crypto-robinhood-hits-record-131b-revenue.htm)
7. [S&P Global Market Intelligence, Kagan research: US prediction market trades are predominantly sports-based, October 2026](https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/10/us-prediction-market-trades-are-predominantly-sports-based)
8. [Crypto Briefing, Robinhood CEO Vlad Tenev predicts crypto will dominate prediction markets, September 21, 2026](https://cryptobriefing.com/robinhood-crypto-prediction-markets-dominance/)
9. [Robinhood Markets, quarterly figures from its SEC filings, retrieved October 11, 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001783879)


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Robinhood has until October 16 to answer Ohio on the prediction markets that out-earned crypto — The Inference. Canonical: https://theinference.org/article/robinhood-has-until-october-16-to-answer-ohio-on-the-prediction-markets-that-out-earned-crypto