Robinhood Builds Rothera To Own the Event-Contract Fees It Once Paid Away

Across tracked venues, monthly notional volume, the total face value of contracts traded, crossed the $50bn threshold for the first time in June, a figure that sat at barely $2.16bn the same month a year earlier. Year-to-date, the sector's trading activity is up 85%, and almost all the June acceleration – a roughly 60% jump from May – traces to a single catalyst: the FIFA World Cup, whose sports activity has pushed the asset class into a new liquidity regime.

Prediction markets are beginning to behave less like one-off political event speculation and more like a repeatable, high-frequency consumer trading product, and the clearest beneficiary of this shift is Kalshi, a US-regulated prediction-market exchange.

The sector kept adding venues, while the volume did the opposite of spreading out. Kalshi entered the year holding 35.2% of all notional volume across every venue and left June with 65.1%. Close to two of every three dollars traded anywhere in prediction markets now settle on a single exchange. In June alone, Kalshi accounted for roughly $32.6bn of notional volume – with $24.9bn drained by sports bets – and represented close to 80% of the category's incremental monthly growth.

(Source: Dune Analytics, Paradigm)

Sports has long been Kalshi's core franchise. Across every relevant operating metric – open interest (the total value of contracts still outstanding), traded volume and transaction count – sports-related event contracts have consistently represented more than 60% of activity. The World Cup simply amplified it.

By every headline, Kalshi looks like the runaway winner of a land grab. But under the hood, the headline never asks who is driving traffic to the exchange.

Winner's hidden landlord

Robinhood is the largest retail brokerage to step into prediction markets and among the first to treat event contracts – which pay out a fixed amount based on whether a specified event occurs – as a core asset class rather than a side experiment. When it switched the product on in March 2025, it exposed the category to the roughly 26mn funded accounts Robinhood had at the time, a distribution surface no standalone exchange could assemble from scratch.

The company's expansion into prediction markets is not an isolated product move, but part of a broader effort to diversify its transaction revenue mix. Historically, crypto has been one of the company's largest earnings drivers, but also its most cyclical, with activity highly correlated to digital-asset bull markets and retail risk appetite. Over the past two years, Robinhood has steadily broadened that base through options, equities – which now carry most of the platform's volume – and futures, reducing its dependence on crypto-driven trading activity. Event contracts represent the next leg of that strategy: a transaction-heavy, year-round, catalyst-rich product driving recurring engagement independent of crypto cycles. World Cups, MLB pennant races, elections, Fed decisions, the news cycle itself – something is always resolving, and every resolution is a reason to trade.

On the first-quarter call, Vlad Tenev, Robinhood's CEO, called prediction markets the fastest-growing business in the company's history and floated a super cycle that could eventually run to 'trillions of contracts a year'.

Robinhood initially entered the space through distribution. For a long time, the company cleared none of that flow itself, routing its event-contract settlements to third-party venues – mostly Kalshi, and in a far smaller way ForecastEx – clipping a fee on the way through. What reads on Kalshi's tape as organic demand is, to a large degree, Robinhood users tapping buy inside a different application.

(Source: Paradigm, Robinhood's Quarterly Reports)

Then football arrived, and the linkage became impossible to miss. On 25 Aug, Robinhood switched on NFL professional games and college matchups days before the season opened, giving the product a recurring sports calendar rather than a one-off event cycle.

Counting every contract settled through Kalshi, Robinhood's monthly routed volume via the exchange jumped from 300mn contracts in Aug 2025 to 1.7bn in September, a roughly 5.7x move in a single month that carried Robinhood to 59.4% of everything Kalshi cleared – the high-water mark of the partnership, and a measure of how quickly the brokerage became one of the exchange's largest distribution channels. The momentum never gave it back, and the Robinhood–Kalshi partnership quickly became a shared growth story.

Since then, the relationship has matured. Robinhood kept climbing in absolute terms, to 3.9bn contracts by May 2026, more than double its September print. Kalshi volumes have continued to grow faster than Robinhood-routed flow, reducing Robinhood's share from the September peak, but the broker still represents a meaningful and persistent distribution channel. Through 2026, the routed share has settled near 25%, a dependency stable enough that both sides now rely on it. And on every contract that crosses the bridge, Robinhood collects $0.02 – a penny of commission it keeps, a penny of exchange fee it gives to Kalshi – netting roughly $0.01 a contract as the floor beneath the whole arrangement.

Enter Rothera

Rothera changes the model. The venue began as MIAXdx, a CFTC-licensed derivatives exchange and clearinghouse that Robinhood and Susquehanna International Group (SIG) bought from Miami International Holdings (MIAX) in January 2026 – the joint venture taking 90%, MIAX keeping 10% – which handed Rothera a regulated marketplace from day one. Since it went live in June, Robinhood has moved from being primarily a front-end distributor of third-party event contracts to a vertically integrated participant in the exchange stack. That is important for margins, product control, market selection and routing. Instead of sharing economics with Kalshi or ForecastEx on every contract, Robinhood can internalize a larger share of the fee pool where contracts settle on Rothera.

The timing was deliberate. Rothera went live around the World Cup, and the early dataset is almost entirely World Cup-driven. Across its first weeks, World Cup contracts represented about 96% of Rothera volume, with MLB and economic-data markets reduced to rounding errors. In practice, Robinhood appears to be routing all World Cup flow through Rothera while leaving other categories – finance, basketball, MLB, tennis and broader event inventory – largely dependent on Kalshi. That creates a two-track revenue structure: legacy third-party flow still routing through Kalshi, and higher-control internalized flow through Rothera.

(Source: Rothera's public files)

The early numbers are already material. On the standard prediction-market convention – counting contract volume at terminal $1 notional – Rothera printed roughly $2.09bn of June notional volume, enough to rank the venue fourth across all prediction markets, behind only Kalshi, Polymarket and Polymarket US. Using settlement-price-weighted volume, a better crude proxy for dollars at risk while contracts remain live, the figure is closer to $890.6mn. Most Rothera contracts are still fresh, live World Cup markets, so the terminal notional overstates current premium exchanged, while settlement-price-weighted volume better approximates traded economic exposure.

Open interest tells the same story from a different angle. Rothera closed June with 109mn, with a 133.4mn peak over the month, effectively level with Polymarket US and trailing only Polymarket and Kalshi, with nearly every dollar of it parked in World Cup settlements because those are close to the only markets it runs.

A month-old exchange does not usually arrive fourth in its category. This one did, and it kept every penny of the economics on the way in. For Robinhood, the Q2 implication is straightforward. The second quarter will be the first where event-contract revenue reflects not only fast-growing Kalshi-routed momentum but also the first contribution from internalized Rothera flow.

One customer, two ledgers

For Robinhood, event contracts are no longer a future growth driver: they stopped being a sideline over the quarter. The company already routed 7.1bn contracts across April and May, 80.7% of its entire first-quarter total in just two months, and June is on track to blow past both. Between the FIFA World Cup, the arrival of Rothera and continued growth across Kalshi, Robinhood is on pace to comfortably clear the 10bn quarterly event-contract threshold for the first time, and is already pushing toward the next target.

Monthly event-contract activity has expanded at roughly 11% compound monthly growth since the start of the year, one of the strongest transaction-growth trends anywhere on the platform, but June marks the structural break.

Rothera alone brought 2.09bn to the table, up from a negligible 2.1mn in May. Until early June, virtually all customer flow settled through Kalshi. With Rothera live, Robinhood began internalizing a significant portion of that activity, routing World Cup contracts almost exclusively through its own exchange while leaving the remainder of its catalogue still settling on Kalshi.

As a result, Kalshi's June headline volume can no longer be treated as a direct proxy for Robinhood activity, which leaves the harder question: how much of Kalshi's own $32.6bn June print is likely driven by the broker?

(Source: Paradigm, compiled from Kalshi's raw data)

Kalshi's June raw-data breakdown makes the estimate possible. Sports ran 76.6% of the book, $24.9bn, and inside it soccer nearly tripled to $6.38bn from $2.30bn in May – pure World Cup, and the first thing to strip out, since it has settled on Rothera now. That leaves $26.2bn in qualifying notional volume.

Removing World Cup contracts still leaves a remarkably diversified book. Beyond soccer, the largest remaining sports categories – MLB, NBA and tennis – generated a combined $6.9bn in the June notional, all products that continue to be prominently distributed through Robinhood's Prediction Markets Hub. Outside sports, crypto also accelerated meaningfully, almost doubling from $2.01bn in May to $4bn in June. Unlike World Cup contracts, these categories continue to settle predominantly through Kalshi and therefore remain the appropriate base from which to estimate Robinhood's routing activity.

The remaining leg is Sports Combos. Introduced by Robinhood as multi-event bets, the product is powered by Kalshi's request-for-quote (RFQ) infrastructure, allowing traders to bundle up to 10 independent event contracts into a single position – the prediction-market equivalent of a sportsbook parlay. These products matter because parlays are consistently the highest-margin and highest-engagement instrument in sports betting, generating more trading activity per customer than single-event wagers.

June demonstrated exactly that. Kalshi's custom parlays exploded to $10.09bn from $3.39bn, a threefold monthly jump, with most of that surge riding the same World Cup wave. Attributing the full $10.09bn to Robinhood-routed activity would risk overstating underlying demand. A meaningful share of the increase reflects World Cup combinations, whose constituent contracts now settle through Rothera rather than Kalshi. To avoid double-counting, a conservative assumption is to remove half of June's incremental Sports Combo growth attributable to World Cup activity, reducing the category from $10.1bn to roughly $6.7bn.

Applying that adjustment reduces Kalshi's June routing universe from $32.6bn to $22.8bn of addressable volume. Applying Robinhood's roughly 25% average routing share throughout 2026 implies approximately $5.7bn of event-contract volume still settled through Kalshi during June. Adding Rothera's $2.1bn of internally settled contracts brings Robinhood's estimated June event-contract activity to $7.8bn.

(Source: Paradigm, Rothera's public files)

What a penny compounds to 

The forecast volume trajectory is now large enough to have a visible impact on Robinhood's financials. Including the 3.2bn event contracts routed during April, 3.9bn in May and our estimated 7.8bn June print, Robinhood is on pace to process roughly 14.9bn event contracts during Q2 2026, a 69.3% increase from the 8.8bn reported in Q1 2026. The remaining question is monetization.

Robinhood's published fee schedule provides a useful lower bound. Contracts routed through Kalshi carry a $0.01 exchange fee per contract, while Rothera-settled contracts currently display a $0.02 fee within the Robinhood interface. Although accounting treatment differs between venue fees and transaction revenue, historical disclosures suggest these values represent a conservative revenue floor.

In the first quarter of 2025, Robinhood booked exactly $3mn of event-contract transaction revenue against 300mn contracts, a clean penny apiece. By the first quarter of 2026, that line had reached $104mn against 8.8bn contracts, an implied $0.012 take (the share of trading value Robinhood keeps as revenue) – so the model runs a band from a $0.01 floor to about a $0.012 ceiling.

The largest change for Q2 2026 is not simply higher volume, but where that volume settles. Assuming the current $0.02 fee on Rothera contracts accrues entirely within Robinhood's vertically integrated stack, the venue's estimated 2.1bn June contracts alone imply approximately $41.8mn of transaction revenue in its first month of operation – more than four times what the entire Robinhood–Kalshi partnership produced in a full quarter a year earlier.

Kalshi's 5.7bn at the split rate adds $57.1mn to $68.5mn depending on the take. Together, June printed between $98.9mn and $110.3mn in event-contract transaction revenue, and at the midpoint of that single month is in the order of a third of the recent quarter's net income for the entire company.

*Forecasts are model-derived estimates based on known April and May activity and forecast for June. Kalshi volume assumes a roughly 25% Robinhood share based on year-to-date run-rate, adjusted for estimated World Cup-related routing through Rothera. Actual results may vary with final venue mix, trading volumes, contract pricing, fee floors and Rothera internalization.

(Source: Robinhood's Monthly Metrics and Quarterly Reports, including June 26 and Q226 forecasts compiled by Sandmark)

Stretch it across the quarter. Layering in April and May prints in the same band lifts Q2 2026 event-contract revenue to a range of $169.9mn to $195.5mn, with a midpoint near $182.7mn – a 76% jump over the first quarter and, annualized off that quarterly run-rate, on a path toward $1bn from a business that barely existed 18 months ago. Event contracts have moved from a footnote inside 'other transactions' revenue', where they sat next to futures commissions and instant-withdrawal fees, to a line that now rivals the pillars, past crypto and equities transaction revenues.

The pillars themselves had an uneven June, and that is where the rest of the tape comes in.

Where one engine stalls, another fires

Robinhood's June is one revenue engine stalling while three others fire. Each transaction line converts volume to revenue at a rate the last five quarters make legible – equities at 0.013% of dollar volume, options at roughly $0.48 a contract, crypto at a compressing take of about 0.24% from about 0.36%, and event contracts at their $0.01 to $0.02 toll, depending on where they settle. Run June's activity at those rates, and the quarter takes shape.

(Source: Robinhood's Monthly Metrics and Quarterly Reports, incl. June 26 and Q2 2026 forecasts compiled by Sandmark)

Crypto is the paradox in the quarter we are modelling. June delivered the worst month of Bitcoin ETF outflows on record, roughly $4.51bn pulled out, according to SoSoValue, and for a broker that reads as opportunity rather than damage because brokers earn on retail piling in and bailing out.

That alone should push June crypto volume back above $30bn, better than double May. Yet, the quarter still looks soft. We estimate Q2 volume near $54.1bn, below the first quarter's reported $65.7bn, dragged down by the weakest April and May in a year – and at the blended take of about 0.236%, that points to quarterly crypto revenue around $127.8mn, under the $134mn Robinhood printed the quarter before. The deeper problem is structural, and it is not a forecast: the take rate has compressed from 0.55% to 0.20% across five reported quarters, a spiral where thinning fees and thinning volume feed each other, so even a volatility spike converts to less revenue than it once did.

Equities and options should run the other way. June traded volatile in the productive sense – indices printing highs and reversing, some of the largest IPOs in years drawing a heavy retail base. The setup shows up in the positioning data before it reaches Robinhood. Index positioning ran hot into mid-June, with open interest on SPX and NDX futures and options across CME and CBOE jumping through the first two weeks of the month against May's baseline, and that kind of index-level activity feeds straight downstream into retail equity and options flow. It puts June in contention for Robinhood's largest equities month on record and within arm's reach of its options high.

We model equity volume reaching roughly $400.1bn, a conservative 26.9% monthly gain in line with the April-to-May jump, which would carry the quarter near $963.8bn, and at the steady 0.013% rate, about $125.3mn in revenue. Options momentum tends to follow equities downstream, benefiting from the same backdrop. A conservative 10% step to 250.4mn contracts, within reach of October's all-time high, would throw off close to $339mn at roughly $0.48 a contract.

Put together, the June tape shows event contracts and equities more than covering for crypto's drift – precisely the diversification Robinhood set out to build.

With every other transaction line broken out – equities, options, crypto, event contracts – one residual remains. Strip prediction markets out of 'other transactions' revenue' and what is left is futures commissions and instant-withdrawal fees, both of which move with raw platform activity rather than any single product. We hold that residual at $65mn for the quarter, in line with the $63mn Q4 2025 peak, on the logic that a quarter this active across every venue drags the ancillary lines up with it – a second-order read on how busy the platform is.

Stack the five lines and the quarter prints a record. Equities at $125.3mn, options at $339.0mn, crypto at $127.8mn, event contracts at $182.7mn and the $65mn residual sum to a potential $839.8mn in second-quarter transaction revenue. The prior high was $776mn, set in the fourth quarter of 2025. Q2 2026 could clear it by $63.8mn, an 8.2% step to a new peak – and the composition is the story because the line doing the heavy lifting, event contracts, did not meaningfully exist a year ago, while crypto, the line that once carried the quarter, drifted away.

Regulatory question underneath it all

One risk sits underneath the whole revenue thesis: whether these products stay legal where Robinhood sells them. Prediction markets occupy contested regulatory ground. The CFTC, a federal derivatives' regulator, treats event contracts as within its remit, while several US state regulators argue that wagering on sports and other outcomes is gambling under their authority. Rothera holds a CFTC licence, which is precisely why that federal-versus-state fight matters here: an adverse ruling, or a state-by-state carve-out of sports contracts, would land the hardest on the World Cup flow now driving the numbers. The faster event contracts scale, the more a reversal has to unwind.

App was never the point

The event-contracts arc – broker to router to exchange owner in 15 months – is one instance of a pattern. On 1 Jul, a day before this snapshot closes, the company scaled that pattern to its entire product surface. It brought online the public mainnet of Robinhood Chain, an Arbitrum-based Layer-2, and what went live was not a feature but a financial system, expanding Robinhood from brokerage into a multi-asset retail trading and market-infrastructure platform.

The stack went live whole. Spot trading routes through Uniswap, a decentralized exchange that lets users trade crypto directly without an intermediary; perpetual futures run through Lighter inside the wallet; and Robinhood Earn brings savings products to its client base, flowing into onchain credit protocols such as Morpho and Maple. Lending, borrowing and collateralization ship as native primitives, with seeded liquidity from day one.

Tokenized equities are one application riding this rail, and the one where Robinhood's structural edge shows most clearly. Robinhood is the only such infrastructure built around a vertically integrated retail trading app, and that is what pushes spot-equity tokenization from a crypto-native niche toward mass adoption: the same 27.7mn funded accounts that trade equities in the app can now hold those positions as composable onchain tokens, route them through Uniswap, post them as collateral and settle around the clock, all inside rails Robinhood controls end to end.

The app was never the destination. It was the distribution – and Robinhood is done renting out what it can own.