Robinhood Dominates Prediction Markets: Rothera Joins US Top 3

The landscape of prediction markets, where users wager on the outcomes of real-world events, is currently undergoing a massive transformation. Robinhood has announced that its newly launched Rothera exchange has already established itself as one of the three most significant players in the United States. During the second quarter of 2026, nearly 2 million customers utilized the platform to trade so-called event contracts. This represents a substantial increase, considering that approximately 1.5 million users were active in the first quarter. The momentum clearly shows that interest in betting on sports, elections, or economic indicators has grown far beyond a niche market.

The financial success of this segment is particularly striking. Robinhood was able to decuple its revenue from event contracts compared to the previous year. With $156 million in revenue for the second quarter, these prediction bets have even overtaken the cryptocurrency business, which contributed $100 million. Only options trading remains a stronger source of income for the broker. Management emphasizes that this growth is not due to short-term market volatility but rather a steadily expanding calendar of tradable events. People enjoy wagering, and they are increasingly doing so on platforms they already use for stock trading.

Numbers and facts

In detail, the results for the second quarter of 2026 demonstrate immense scaling. The total number of event contracts traded amounted to 13.6 billion, representing an increase of over 50 percent compared to the first quarter. The new Rothera exchange, which only began operations in June 2026, already contributed $17 million to revenue and handled 2.1 billion contracts. CEO Vlad Tenev described Rothera as one of the three largest designated contract markets (DCM) in the country. The joint venture with partner Susquehanna aims to reduce reliance on third-party exchanges like Kalshi or ForecastEx.

"Rothera started supporting Robinhood prediction markets and has rapidly become a top-3 DCM, top-3 designated contract market in the U.S." - Vlad Tenev, CEO of Robinhood

Financially, the group as a whole is performing excellently. Total net revenue climbed by 32 percent to $1.31 billion. Net income even rose by 48 percent to $573 million. The number of Gold subscribers, who pay for premium features, grew by 39 percent to 4.84 million customers. This indicates that Robinhood is successfully monetizing its user base, while total platform assets reached $369 billion.

Background

The introduction of Rothera was a strategic move. Previously, Robinhood had to route customer orders through third-party providers, which limited control over the user experience and margins. By acquiring its own DCM license and establishing a clearinghouse, the broker can now act as a full infrastructure provider. While the company intends to maintain partnerships with Kalshi and ForecastEx for now, CFO Shiv Verma made it clear that the majority of trading volume will migrate to their own Rothera exchange in the medium term. This could intensify competition in the U.S. market, as Robinhood holds a dominant position with its vast reach of 28.4 million funded accounts.

Interestingly, the company is already looking beyond the retail market. Initial considerations involve opening Rothera to institutional clients or as a business-to-business platform in the future. This would mean other financial service providers could use Robinhood's technology and exchange license to offer prediction markets to their own clients. Tenev believes the sustainability of this growth is secured by events such as the FIFA Club World Cup, the upcoming football season, and political elections. Prediction markets thrive on the fact that the world never stands still.

Why it matters for German players

For German users, the situation is complex. While Robinhood offers event contracts as regulated financial products in the U.S., such wagers often fall under the Interstate Treaty on Gambling 2021 (GlüStV 2021) in Germany. The Joint Gambling Authority of the States (GGL) strictly regulates the market here. Offers like prediction markets for political events are currently not permitted for local providers with a German license. Anyone wishing to play legally in Germany must adhere to the GGL whitelist, which only includes sports betting and virtual slot games.

German players are also subject to strict protection measures. These include a cross-operator monthly deposit limit of 1,000 euros and a stake limit of 1 euro per round for slots. This data is monitored via the LUGAS system to prevent gambling addiction. Since U.S. platforms like Robinhood or Kalshi do not hold a German GGL license, access for residents in Germany is typically blocked or legally risky. A legal market for event betting based on the U.S. model does not currently exist in Germany, which is why players should stick to classic, licensed bookmakers from the GGL list.

What it means for GGL-licensed casinos

German casino operators with a GGL license are closely watching developments in the U.S. Prediction markets demonstrate that interest in event-based betting is growing when integrated into a modern, easy-to-use app. For local providers, however, this represents a competitive disadvantage, as they are limited by the narrow framework of permitted sports and betting types. Robinhood's success in the U.S. could eventually spark a discussion on whether regulatory openings for prediction markets in the EU and specifically in Germany would be sensible to drain the black market for political betting. Until then, the GGL license remains the only seal of quality for legal and safe gambling in Germany.