On December 16, Robinhood (HOOD.US) officially launched its "YES/NO" themed event, marking a significant upgrade to its prediction market business. The move is widely seen as a direct challenge to traditional gambling giants like DraftKings and FanDuel, as well as existing prediction platforms such as Kalshi. Analysts, including those at Bank of America, warn that this "high-tech" disruption by Robinhood could fundamentally alter customer acquisition costs and fee structures across the industry.
Bank of America noted that Robinhood's recent announcement of a vertically integrated prediction market joint venture with Susquehanna Investment Group may signal reduced reliance on Kalshi. "While some investors view any setbacks for Kalshi as positive for online sports betting operators, we believe Robinhood's aggressive expansion poses a competitive threat to DraftKings (DKNG.US) and FanDuel," cautioned analyst Julie Hoover.
Another key focus is the competition in event contract fees among Robinhood, Kalshi, and Polymarket, as they vie for user attention against sports betting apps like FanDuel, DraftKings, and BetMGM—which rely on recognizable bonus bets, profit boosts, and promotions.
In November 2025, Robinhood announced its partnership with Susquehanna, planning to acquire a 90% controlling stake in derivatives exchange MIAXdx. This strategic move aims to create a new, federally regulated platform for derivatives and prediction markets, with the deal expected to close in early 2026.
The acquisition highlights Robinhood's push toward a fully autonomous, vertically integrated trading ecosystem. By eliminating third-party platform fees and leveraging zero-commission trading and deep liquidity, Robinhood seeks to mainstream event contracts—spanning sports to macroeconomic events—among millions of retail investors.
Notably, MIAXdx is already CFTC-approved to list and clear fully collateralized futures, futures options, and swaps. This acquisition will strengthen Robinhood's infrastructure for its derivatives and prediction market operations. The new exchange will be managed by a joint venture, with Robinhood as the majority owner and Susquehanna acting as the liquidity provider from day one.
The core objective is to expand Robinhood's rapidly growing "prediction contracts" business, covering a wide range of events from sports to elections. Unlike traditional fixed-odds betting, prediction markets rely on peer-to-peer pricing, with real-time price adjustments reflecting collective market expectations—offering more diverse betting options than conventional gambling firms.
In March, Robinhood partnered with CFTC-regulated KalshiEX to introduce a "Prediction Market Hub" within its app. This feature quickly became one of Robinhood's fastest-growing revenue streams, with the company reporting in its Q3 earnings that the prediction market business was "growing at an extremely rapid pace." Within a year of launch, the segment recorded 9 billion customer contracts and attracted over 1 million users.
Combined with its June acquisition of Luxembourg-based crypto exchange Bitstamp, Robinhood's prediction market-related annualized revenue surpassed $100 million in less than a year.
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