Robinhood Breaks Free from Meme Stocks to Bet on Prediction Markets

Robinhood Markets Inc. (NASDAQ:HOOD) has struck a strategic deal to enter the prediction markets space, announcing a partnership with Susquehanna International Group and the acquisition of a CFTC-regulated derivatives exchange from Miami International Holdings (MIAX). The move positions the retail brokerage to expand its offerings into futures and derivatives tied to events such as elections, sports, and other global happenings.

Under the agreement, Robinhood and Susquehanna will acquire 90% of MIAX Derivatives Exchange (MIAXdx), a subsidiary of MIAX that operates as a Designated Contract Market and Derivatives Clearing Organization. MIAX will retain a 10% equity stake in the exchange, providing it with a minority governance and economic interest while granting Robinhood operational control. The transaction, expected to close in Q1 2026, is subject to regulatory approvals and filings with the Commodity Futures Trading Commission (CFTC).

The new exchange will build on MIAXdx's existing infrastructure, which has regulatory approval to list and clear fully collateralized futures, options on futures, and swaps. Robinhood plans to leverage this framework to launch prediction contracts, a product line that has already proven lucrative for the firm. Last year, Robinhood's partnership with Kalshi -a regulated prediction market platform- saw over 1 million customers trade 9 billion contracts, making it the brokerage's fastest-growing revenue stream.

"Through our retained equity stake, the transaction announced today will provide MIAX with access to the growing prediction markets on an expedited basis," said Thomas P. Gallagher, MIAX's chairman and CEO, emphasizing the strategic alignment with industry leaders. Robinhood's VP and GM of Futures and International, JB Mackenzie, added that the partnership aims to deliver products "that meet the needs of Robinhood's customers," though the firm's shares remained flat following the announcement. The deal underscores a broader industry shift toward prediction markets, which have gained traction as both retail and institutional investors seek tools to hedge or speculate on real-world events. Competitors like Kalshi and Polymarket have already secured significant funding, with Kalshi recently raising $1 billion at a $11 billion valuation. Robinhood's entry could intensify competition, particularly as it integrates its existing Kalshi partnership with the new exchange's infrastructure.

Regulatory compliance remains a critical focus. MIAXdx's CFTC approval provides a foundation for legitimacy, though the transaction must navigate customary regulatory hurdles. The exchange plans to begin operations in 2026, aligning with Robinhood's broader strategy to diversify beyond its meme-stock-driven retail brokerage model.

Miami International's stock rose 4.1% in after-hours trading following the announcement, reflecting investor optimism about the strategic pivot. For Robinhood, the acquisition represents a calculated expansion into a niche yet high-growth segment, leveraging its user base and technological capabilities to capture a slice of the prediction market boom.