Landing at Third Place, Rothera is Shaking Up the Prediction Market Landscape
- Core Thesis: Robinhood's in-house prediction market, Rothera, has vaulted to third place in the industry just two weeks after its launch, with weekly trading volume reaching $559 million. Its rise is essentially about capturing existing order flow originally directed to partner Kalshi, thereby strengthening its own value capture capabilities and potentially disrupting the existing competitive landscape of prediction markets.
- Key Elements:
- Within three weeks of launch, Rothera's weekly trading volume surged from $21.9 million to $559 million, placing it just behind Kalshi and Polymarket, demonstrating rapid growth.
- Rothera's growth primarily stems from shifting orders that previously flowed from Robinhood channels to Kalshi onto its own platform—a migration of existing volume rather than the creation of new users.
- Robinhood once contributed an estimated 25%-35% of Kalshi's trading volume. By using its own platform, it now directly captures this flow, reducing the revenue share paid to Kalshi.
- Hood House estimates that Robinhood's prediction market business generates approximately $4.9 million in daily revenue and could reach a $1 billion annual revenue run rate this year, surpassing its historical peak in cryptocurrency revenue.
- In response to this competition, Kalshi is in talks with investment banks regarding an IPO, using this leverage to demand integration with their systems to explore new distribution channels like banks and brokerages.
Original by Odaily (@OdailyChina)
Author: Azuma (@azuma_eth)
Last week, Odaily published an article titled “The First Prediction Market Concept Stock Has Emerged!”, which mainly discussed how Robinhood is intercepting orders that previously relied on Kalshi by building its own prediction market, Rothera, thereby reducing revenue sharing with Kalshi and keeping profits within its own ecosystem.
Although we had anticipated that Rothera wouldn't face the cold-start problems common among other competitors, the platform's data performance over the past week has still far exceeded our previous expectations. After all, it's hard to imagine a platform that has just launched for two weeks directly landing in third place in the highly competitive prediction market space, trailing only the two giants, Kalshi and Polymarket.
Artemis data shows that in the week ending June 8, Rothera, as a new platform, had a weekly trading volume of only $21.9 million, significantly lagging behind second-tier platforms like Opinion, Predict, and Limitless. However, in the week ending June 15, Rothera's weekly trading volume directly jumped to third place in the industry, reaching $276 million. In the latest week ending June 22, Rothera's weekly volume increased to $559 million, nearly reaching one-fifth of Polymarket's volume.
An Atypical Growth Case (Skip if you read the previous article)
It's important to clarify that Rothera's rise is essentially not driven by the creation of new users (though some users may have entered due to the World Cup), but rather a migration of existing orders, not the creation of incremental users.
Over the past year or more, Robinhood has been one of Kalshi's most crucial distribution channels. Leveraging tens of millions of retail users and mature trading entry points for stocks, options, and cryptocurrencies, Robinhood has funneled a large number of orders to Kalshi. Piper Sandler analysts estimated that trading volume conducted through Robinhood channels accounted for approximately 25%-35% of Kalshi's total volume.
The issue is that while these orders originate from Robinhood users, they don't belong to Robinhood itself. Under the previous cooperation model, Robinhood acted more like a front-end traffic gateway, while Kalshi was the infrastructure provider truly responsible for matching, clearing, and settlement. Revenue generated from each transaction had to be split between the two parties.
Rothera is Robinhood's weapon to break this revenue-sharing model. Since the beginning of this month, Robinhood has started shifting some World Cup-related event contracts for execution within Rothera, meaning a large number of orders that would have previously flowed to Kalshi now remain within Robinhood's own system.
Therefore, in a sense, the surge in Rothera's trading volume is less a threat to other prediction markets like Polymarket, Predict, or Limitless, and more of a direct “drain” on Kalshi.
Robinhood's Value Capture
The rapid growth of Rothera most directly strengthens Robinhood's ability to capture value from prediction market orders on its platform.
Hood House, an investment research media channel that has long tracked Robinhood, compiled public data and estimated that as of June 20, Robinhood's prediction market business traded a total of 34,700 contracts in a single day, corresponding to a daily revenue of approximately $4.9 million.
Hood House subsequently disclosed its calculation logic:
- Rothera (mainly hosting World Cup-related markets) had a single-day trading volume of 137 million contracts, corresponding to a transaction volume of approximately $47 million;
- In comparison, Kalshi's total single-day volume was about 1.5 billion contracts, corresponding to a transaction volume of approximately $416 million; excluding World Cup-related markets, Kalshi's volume was about 1 billion contracts, corresponding to a transaction volume of about $260 million;
- Considering that orders from Robinhood users still account for about 20% (conservative estimate) of Kalshi's non-World Cup market volume, this implies that approximately 210 million contracts and $52 million in transaction volume from Kalshi's non-World Cup event contracts were completed via Robinhood.
Based on this, Hood House further estimated aggressively that if this growth rate continues, Robinhood's prediction market business has the potential to achieve a revenue scale of $1 billion this year. This figure would even surpass Robinhood's historical peak in cryptocurrency-related revenue, which was approximately $900 million achieved in 2025.
Kalshi's Counter-strategy: Finding New Channels
Faced with Rothera's rapid rise, Kalshi has clearly recognized the problem.
For Kalshi, Robinhood was both a partner and one of its most important traffic sources. However, as Robinhood begins to migrate more orders to its own platform, the two have become direct competitors.
A recent report from The Information may reveal Kalshi's response strategy. Sources familiar with the matter revealed that Kalshi has started contacting several investment banks for early, informal discussions regarding a potential future IPO. More notably, in communications with these investment banks, Kalshi has put forward a clear requirement: if they wish to qualify for underwriting a future IPO, these institutions need to prioritize completing the technical integration of their own systems with Kalshi, enabling their institutional clients to directly participate in trading event contracts on Kalshi's platform.
In other words, Kalshi is leveraging the IPO opportunity to find new distribution channels, connecting the prediction market to the client networks of banks, brokerages, and other financial institutions. This may also signal a subtle shift in the competitive landscape of the prediction market industry. In the past, the market focused on who could offer more contracts and who could design better products. Now, as prediction markets move increasingly into the mainstream financial system, the competitive focus is shifting to another dimension: whoever controls the user gateway can effectively control the value.
The rise of Rothera has already demonstrated the significance of distribution capability. Landing in the third spot in the industry seems effortless; whether it can challenge Kalshi and Polymarket in the future no longer seems like a formidable challenge.
