Robinhood's Infrastructure Push Challenges Prediction Market Status Quo

Robinhood Markets Inc. is accelerating its expansion into prediction markets through a strategic joint venture with Susquehanna International Group, aiming to capture a larger share of a rapidly growing sector. The partnership, which includes acquiring MIAXdx-a CFTC-licensed derivatives exchange-positions Robinhood to directly list and clear event-based contracts, bypassing reliance on third-party platforms like Kalshi according to Marketscreener. This move follows Bernstein analysts' assertion that prediction markets have become Robinhood's fastest-growing revenue stream, with over 9 billion contracts traded by 1 million users since their launch in 2024. In Q3 2025 alone, the platform processed 2.3 billion contracts, generating $2.5 billion in volume-57% of Kalshi's October activity.

The joint venture underscores Robinhood's ambition to leverage its 14 million active traders for greater revenue capture. By controlling its own CFTC-regulated infrastructure, Robinhood can offer enhanced product variety and execution quality, according to JB Mackenzie, VP of Futures and International at Robinhood . The exchange, expected to launch in 2026, will serve Futures Commission Merchant platforms and expand Robinhood's derivatives ecosystem . Susquehanna's role as a day-one liquidity provider further solidifies the venture's operational backbone .

Bernstein analysts highlight a structural shift in the prediction market landscape, with liquidity platforms like Kalshi and Polymarket competing against distribution-focused entities such as Robinhood and Coinbase. Robinhood's existing partnership with Kalshi, which handles over 50% of its market volume, will likely persist but be supplemented by direct offerings from its new infrastructure. Meanwhile, Polymarket's re-entry into the U.S. market after securing CFTC approval in 2025 adds another layer of competition according to Marketscreener.

The sector's growth is attracting major players. Coinbase, which revealed early prediction-market code in its app, is poised to launch its own platform during a December 17 event. The timing aligns with broader regulatory scrutiny of event contracts, particularly in states like Nevada, where a federal judge recently ruled Kalshi must halt sports-related trading . Robinhood has announced plans to appeal the decision, signaling its commitment to defending its market position.

Bernstein reiterated an "outperform" rating for Robinhood, setting a $160 price target (38% above its November 2025 closing price of $115.57) based on a 40x multiple of 2027 estimated earnings. The firm's confidence stems from Robinhood's demographic alignment with prediction markets, which attract retail traders seeking speculative opportunities. With 14 million active users, the platform is uniquely positioned to scale as the sector matures.

As competition intensifies, the lines between traditional derivatives and blockchain-based prediction markets blur. Coinbase's entry, coupled with Gemini's CFTC regulatory pursuit and DraftKings' exchange acquisitions, signals a broader institutional embrace of event-based trading . Robinhood's infrastructure-driven strategy, however, could redefine the competitive landscape by combining retail accessibility with institutional-grade execution.