Robinhood, the first stock in market prediction concepts

By Azuma, Odaily Planet Daily

The World Cup’s war drums have already sounded, and the total trading volume across the entire network for prediction markets is continuously setting new records. But as an industry leader, Kalshi’s mood probably isn’t very good right now.

The reason isn’t volatility in Kalshi’s own business data. Instead, another formidable rival has “suddenly” appeared in front of Kalshi after Polymarket—and this opponent was once Kalshi’s most important ally.

Odaily note: Data is sourced from Defillama.

Kalshi’s Most Important Traffic Channel — Robinhood

Let’s turn the clock back to March 2025. At that time, Kalshi announced a partnership with U.S. online brokerage Robinhood. Robinhood would use Kalshi’s platform to provide prediction market trading services to its users, allowing them to bet on events such as politics, economics, sports, and more.

From a business model perspective, this is a classic “mutual benefit” arrangement. Robinhood, which is responsible for user entry and trade distribution, can directly use Kalshi’s mature products. Kalshi, which is responsible for the underlying markets, matching, clearing, and regulatory compliance systems, can tap into the massive pool of retail users that Robinhood has.

The later story also proved the “win-win” outcome of this cooperation. Through Robinhood’s distribution channels, Kalshi indirectly gained a huge number of users and transaction volume. Piper Sandler analyst previously estimated that “trading volume completed through the Robinhood channel accounts for about 25%-35% of Kalshi’s total trading volume.” Those orders ultimately turned into accounting profits for both sides. Robinhood independently charges a fixed fee for every Kalshi event contract traded through that channel—$0.01 per contract per side—then shares the revenue with Kalshi (the specific split ratio was not disclosed).

The Q1 earnings report disclosed at the end of April showed that in Q1 this year, Robinhood executed 8.8 billion event contract trades, driving “other trading revenue” up 320% year over year to $147 million. Prediction markets have become the most eye-catching new engine in Robinhood’s product lineup in terms of growth rate.

But recently, this relationship has undergone some subtle changes.

Robinhood’s Ambition: Reclaim the Cake It Allocated to Kalshi

As countless times proven in the history of the internet, once a channel gains enough say, it won’t be satisfied with merely being a channel. Robinhood is no exception.

Although the cooperation with Kalshi also brought Robinhood considerable revenue, as prediction markets became one of the fastest-growing new businesses on the platform, Robinhood no longer felt satisfied with the current revenue-sharing arrangement.

In the partners’ cooperation model, Kalshi provided the markets and infrastructure, while Robinhood provided users and order flow. But as the collaboration deepened, Robinhood gradually realized that what might truly be scarce wasn’t the markets themselves, but the user entry point it firmly controlled. After all, for most Robinhood users, they don’t care whether the order is ultimately executed on Kalshi or on another platform. What users see is just a trading entry point inside the Robinhood App—not the underlying infrastructure provider behind it.

In other words, Robinhood has always controlled one of the most critical resources in prediction markets—distribution capability. Since the users belong to Robinhood, why should the orders flow to others?

In fact, at the same time Robinhood was quickly validating demand for prediction markets with Kalshi, another set of Plan B was launched later as well.

In November 2025, Robinhood announced a joint venture with Susquehanna, a Wall Street quantitative trading giant, and planned to acquire the derivatives exchange MIAXdx, which is regulated by the CFTC. According to official statements, this joint venture in the future would operate an independent futures and derivatives exchange and clearing institution, and prediction markets are one of its key focus areas. At the time, many people viewed it more as an infrastructure investment. But as additional information was disclosed afterward, people gradually came to realize that Robinhood’s goal was far beyond merely finding a new partner for prediction markets.

In January 2026, the deal was officially completed. Robinhood and Susquehanna obtained 90% control of MIAXdx, while taking over a complete CFTC-regulated framework, including Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO) qualifications. Subsequently, MIAXdx was renamed Rothera Exchange, and its clearing institution was renamed Rothera Clearing.

By then, Robinhood already had the core elements required to independently operate prediction markets. What it lacked was a mature product comparable to Kalshi—but given Robinhood’s extensive experience in developing internet products, this clearly wasn’t difficult.

Rothera’s Opportunity: The World Cup

In June 2026, after roughly half a year of accelerated development, the Rothera product began to take shape. Robinhood finally made the almost inevitable move—gradually shifting orders that originally flowed to Kalshi into its own self-controlled system.

Robinhood intentionally chose an excellent launch battlefield for Rothera: the World Cup. For prediction markets, the World Cup is undoubtedly one of the trading themes with the strongest traffic effect. Whether it’s match outcomes, qualification results, or the champion’s identity, the related markets can attract a large number of new users to participate in trading in a short time. For a newly launched platform like Rothera, there’s no better scenario to use as a cold-start venue.

According to Robinhood’s official disclosure, during this year’s World Cup, covering a total of 104 matches, some event contracts would be directed to Rothera for matching and clearing. These include markets such as the outcome of each World Cup match, the team that ultimately becomes the World Cup champion, and the total number of goals in each match.

Compared with the earlier model that relied entirely on Kalshi, this is Robinhood’s first time to introduce prediction market orders into its own trading system on a large scale.

From the results, Rothera clearly seized the opportunity. According to data disclosed by Hood House, a research media outlet that tracks Robinhood’s activity, on June 12, Rothera completed 44.2 million contract trades, corresponding to an approximate U.S. dollar trading volume of $24.4 million. On June 13, Rothera completed another 69.7 million contract trades, corresponding to an approximate U.S. dollar trading volume of $20.9 million… While these figures still fall short of Kalshi’s popular markets that often reach hundreds of millions of dollars, considering that Rothera had in fact just gone live a few days earlier, this performance is already sufficiently successful.

For Robinhood and Kalshi, this indicates that the balance of the cooperation between them has already started to tilt. On Robinhood’s side, the fee income that previously had to be shared with Kalshi can now be kept more within its own ecosystem. On Kalshi’s side, this means that one of its most important growth engines has begun to show signs of loosening.

And the World Cup is clearly only the beginning of Rothera’s gradual encroachment on Kalshi. Looking further into the future, Robinhood will inevitably expand Rothera’s coverage to more sports events as well as themes such as economics and politics. Those orders that originally flowed to Kalshi will be intercepted by Rothera in sequence.

Since Robinhood and Kalshi have never publicly disclosed their revenue-sharing proportions (some reports claim it is 50%:50%, but no official information has been seen), we cannot know the exact value of this interception. However, considering that Robinhood achieved $147 million in prediction market-related revenue in Q1 alone—and that the World Cup in Q2 and further mid-term elections are obviously likely to bring even larger trading activity—measured on a per-year basis, the value of this interception could potentially reach several hundred million dollars.

Who Controls Distribution, Controls Everything

The story of Robinhood and Kalshi shifting from allies to rivals once again illustrates a logic that has repeatedly been verified in internet markets: products are easy to create, but it’s difficult to find traffic. Whoever controls distribution controls everything.

In recent years, the market has generally believed that Kalshi’s core moat comes from regulatory licenses, exchange qualifications, and clearing capabilities. Therefore, whether it’s brokerages like Robinhood or various media, community, and traffic platforms, at their core they are essentially just Kalshi’s channel partners and traffic entry points. However, the emergence of Rothera proves one thing: in an environment where products are becoming highly homogeneous, the product itself may not be the most important element. What remains truly scarce is always the users.

Where users are, liquidity will be; where liquidity is, the market will be. When Robinhood controls the entry point for tens of millions of retail users, it has every capability to direct those users to any trading venue. For users, they don’t care whether their orders are ultimately executed on Kalshi or Rothera. As long as the experience is not noticeably different, it doesn’t matter who is doing the matching and clearing behind the scenes.

If the theme of the prediction market industry in the past few years was the market competition between Polymarket and Kalshi, then in the coming years the theme may become a channel war instead. By incubating Rothera, Robinhood is essentially carrying out a reverse integration initiated from the channel side of the market. And as more platforms with traffic entry points begin to recognize the strategic value of prediction markets, similar stories are likely to continue. Whether it’s exchanges, brokerages, social platforms, or media platforms, they could all become new entry gateways for prediction markets.

And when the gateway begins to control the market and the channel gains pricing power, the ultimate winner in the prediction market industry may no longer be the platform that matches orders, but the one closest to users—and the one most capable of controlling distribution.

In the internet era, this has always been the case. In the mobile internet era, it’s also the case. This time, there’s nothing unexpected about it either.