Robinhood's prediction market segment is witnessing remarkable growth, with a user base that has expanded by approximately one-third since the beginning of the year.
In the second quarter, nearly 2 million customers engaged in trading event contracts, marking a significant milestone for the company. The recently launched Rothera exchange has quickly become one of the three largest designated contract markets (DCMs) in the United States, according to company executives.
The financial results for Q2 indicate that revenue and trading volume from event contracts surged by around 50% compared to Q1.
During the earnings call, CEO Vlad Tenev highlighted that Rothera, a joint venture with Susquehanna that commenced operations in June, has rapidly positioned itself as a leading federally regulated exchange for futures and event contracts.
Rothera's support for Robinhood's prediction markets has propelled it into the top tier of DCMs in the U.S. CFO Shiv Verma noted that most of Robinhood's prediction market activities are expected to transition to Rothera in the near future.
Tenev emphasized the ambition for Rothera to continue its growth trajectory. This launch allows Robinhood to have greater control over the prediction market experience, moving away from reliance on third-party exchanges like Kalshi and ForecastEx.
However, the company plans to maintain its partnerships with these exchanges, ensuring customers have access to multiple trading platforms.
Robinhood also reported that its prediction market user base has reached nearly 2 million, up from about 1.5 million in the first quarter. This growth is attributed to a broader calendar of tradable events rather than sporadic activity spikes. Tenev cited the FIFA Club World Cup as an early success for Rothera.
When questioned about the sustainability of interest post-tournament, Tenev remarked, “The great thing about prediction markets is there’s events all the time,” pointing to upcoming sports seasons and the U.S. midterm elections as future drivers.
Average daily volumes for event contracts in July remained consistent with Q2 averages, indicating strong customer engagement.
Overall, Robinhood's earnings reveal that prediction markets are becoming a vital part of its trading business, with revenue from event contracts reaching $156 million in Q2—ten times higher than a year prior and nearly 50% more than the previous quarter. Rothera alone contributed $17 million to this total.
Customers traded a staggering 13.6 billion event contracts, a growth of over 50% from Q1, with 2.1 billion contracts originating from Rothera.
This data underscores the increasing significance of prediction markets in Robinhood's revenue model. Event contracts generated more income than cryptocurrency trading, which brought in $100 million, ranking just behind options trading. In Q2, event contracts accounted for about 20% of transaction-based revenue, up from 16.7% in Q1 and 13% in Q4 2025.
Executives also hinted that Rothera might evolve to serve a broader institutional clientele in the future, potentially transforming into a business-to-business platform.