Robinhood is reshaping the U.S. prediction market landscape by moving away from relying on third-party exchanges and building its own regulated trading infrastructure.
After spending nearly a year distributing prediction contracts through Kalshi, Robinhood acquired a Commodity Futures Trading Commission (CFTC)-licensed derivatives exchange, rebranded it as Rothera, and has gradually begun routing customer orders through its own platform. The move gives Robinhood greater control over trading, fees, and customer experience while reducing its dependence on external providers.
Robinhood acquires its own regulated exchange
Instead of building a derivatives exchange from scratch, Robinhood acquired MIAXdx, formerly known as LedgerX, alongside trading giant Susquehanna International Group.
The exchange was rebranded as Rothera, providing Robinhood with:
- A CFTC-regulated derivatives exchange
- A licensed clearinghouse
- Existing regulatory approvals
- Institutional market-making support from Susquehanna
By purchasing an already licensed platform, Robinhood significantly accelerated its entry into the growing prediction market sector.
Migration from Kalshi is already underway
Robinhood did not immediately stop working with Kalshi.
Instead, the company has gradually shifted certain products onto Rothera while continuing to route more specialized contracts through Kalshi.
The transition began with:
- Major League Baseball event contracts
- Economic data markets
- FIFA World Cup prediction markets
Core contracts such as match winners, tournament champions, spreads, and totals have increasingly been processed through Rothera.
Meanwhile, more complex markets—including player props and parlay-style contracts—continue to be offered through Kalshi.
According to Robinhood executives, most prediction market activity is expected to migrate to Rothera over time.
Event contracts become a major business
Prediction markets have become one of Robinhood’s fastest-growing business segments.
The company has processed:
- More than 16 billion event contracts this year
- Compared with approximately 12 billion during all of 2025
The financial impact has also become increasingly significant.
Robinhood reported approximately $147 million in quarterly revenue from event contracts—surpassing revenue generated by its cryptocurrency trading business during the same period.
The rapid growth helps explain why Robinhood chose to own the exchange infrastructure rather than continue relying on third-party providers.
Customer relationships become the competitive advantage
The shift highlights an important trend in financial platforms.
While exchange licenses, clearing infrastructure, and liquidity providers can be acquired, Robinhood already controls something much harder to replicate—a massive retail customer base.
Millions of users already access Robinhood’s app every day.
Owning both the customer relationship and the exchange allows the company to capture more revenue while offering lower fees by removing intermediaries from the transaction process.
Crypto.com discussions suggest broader strategy
Recent reports indicate Robinhood is also exploring a partnership with Crypto.com to offer additional prediction market contracts within its platform.
If completed, Robinhood would provide access to contracts from multiple exchanges, including:
- Rothera
- Kalshi
- ForecastEx
- Potentially Crypto.com
Rather than operating a single exchange, Robinhood appears to be building a marketplace where several providers compete for customer order flow while Robinhood remains the primary customer interface.
Kalshi faces growing competition
Kalshi has benefited enormously from Robinhood’s retail user base over the past year.
However, as Robinhood redirects more trading volume toward Rothera, Kalshi may lose a meaningful source of activity.
The exchange has already responded by expanding its own product offerings and strengthening direct relationships with traders instead of relying primarily on distribution partners.
As competition increases, prediction market operators may need to differentiate themselves through liquidity, pricing, and product innovation.
Regulatory questions remain
Robinhood’s strategy also raises regulatory considerations.
Because the company now owns one of the exchanges receiving customer orders, regulators may examine how routing decisions are made.
Robinhood states that contracts are routed based on factors such as:
- Market liquidity
- Contract quality
- Settlement clarity
Still, some observers believe greater transparency around routing practices could become increasingly important as prediction markets continue expanding.
Outlook
Robinhood’s acquisition of Rothera marks a significant shift in the prediction market industry.
Instead of serving only as a distributor of third-party contracts, the company is becoming both a trading platform and an exchange operator.
As more trading activity moves onto Rothera and Robinhood explores partnerships with additional providers, competition among prediction market exchanges is likely to intensify.
The success of this strategy will depend on whether Robinhood can maintain strong liquidity, competitive pricing, and customer trust while balancing the responsibilities of operating its own regulated exchange.
