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It is truly risk free. You always buy the call using the customer's money but you only give them the call if every part of the parlay is correct. Assuming they charge a commission in addition to the asset price to cover transaction processing they shouldn't lose money

Edit: I don't really know how pricing these things usually works but I could see taking some risk on to price these attractively

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I get that Robinhood's business model is stealing from the poor and giving to themselves, and their customers are mostly unsophisticated, but why wouldn't the customers just buy the underlying call options if the price to buy the parlay is the sum of the underlying options?

Because, to quote your comment, "their customers are mostly unsophisticated."

And, part of the appeal of the product, is they only pay out if *all of them are in the money. Hence the "lotto-like" return profile.

While Robinhood users are unsophisticated (seriously use another brokerage…) I think that they would see through this.

Why would anyone ever take that bet? It has to be leveraged, which is where the risk comes from.

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