Rothera Drops into Third Place, Shaking Up the Prediction Market Landscape
- Core Thesis: Robinhood’s in-house prediction market, Rothera, has vaulted to third place within just two weeks of launch, recording $559 million in weekly trading volume. Its rise essentially stems from redirecting existing order flow previously routed to partner Kalshi, thereby strengthening its own value capture capabilities and potentially upending the current competitive landscape of prediction markets.
- Key Elements:
- Within three weeks of its launch, Rothera’s weekly trading volume surged from $21.9 million to $559 million, placing it third behind Kalshi and Polymarket, marking rapid growth.
- Rothera’s growth primarily results from redirecting orders that previously flowed through Robinhood’s channels to Kalshi, representing a migration of existing volume rather than the creation of new users.
- Robinhood previously contributed an estimated 25%-35% of Kalshi’s trading volume; it is now capturing this flow directly via its own platform, reducing revenue sharing with Kalshi.
- According to Hood House estimates, Robinhood’s prediction market business generates approximately $4.9 million in daily revenue, potentially reaching a $1 billion annual run rate this year, surpassing its peak cryptocurrency revenue.
- In response to this competition, Kalshi is engaging investment banks to explore an IPO, using these discussions to require banks to integrate its system, thereby opening new distribution channels such as banks and brokerages.
Original: Odaily Planet Daily (@OdailyChina)
Author: Azuma (@azuma_eth)
Last week, Odaily Planet Daily published an article titled "The First Prediction Market Concept Stock Has Arrived!," which mainly discussed how Robinhood is intercepting orders that previously relied on Kalshi by building its own prediction market, Rothera. This move aims to reduce revenue sharing with Kalshi and retain profits within its own ecosystem.
Although we had anticipated that Rothera would not face the common cold-start problem plaguing other competitors, the platform's performance over the past week has still far exceeded our previous expectations. After all, it's hard to imagine a platform that launched just half a month ago could directly land in third place in the highly competitive prediction market sector, with only Kalshi and Polymarket ahead of it.
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, still lagging significantly 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 trading volume surged to $559 million, nearly one-fifth of Polymarket's volume.
An Atypical Growth Case (Feel free to skip if you read the previous article)
It's important to clarify that Rothera's rise is 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 order volume, not the creation of incremental users.
Over the past year or so, Robinhood has been one of Kalshi's most important distribution channels. Leveraging tens of millions of retail users and mature trading interfaces for stocks, options, and cryptocurrencies, Robinhood has funneled a massive number of orders to Kalshi. Piper Sandler analysts estimated that trading volume routed through Robinhood accounted for approximately 25%-35% of Kalshi's total volume.
The issue is that although these orders originate from Robinhood users, they do not belong to Robinhood itself. Under the previous partnership model, Robinhood acted more as a front-end traffic gateway, while Kalshi was the infrastructure provider responsible for matching, clearing, and settlement. Revenue generated from each transaction had to be split between the two parties.
Rothera is the weapon Robinhood has deployed to break this revenue-sharing model. Since the beginning of this month, Robinhood has begun shifting some World Cup-related event contracts to be executed internally on Rothera. This means that a significant portion of orders that would have previously flowed to Kalshi are now retained 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 a direct "drain" on Kalshi.
Robinhood's Value Capture
The most direct impact of Rothera's rapid growth is the strengthening of Robinhood's ability to capture value from prediction market orders on its platform.
Hood House, an investment research media outlet that has long tracked Robinhood, compiled public data indicating that as of June 20, Robinhood's prediction market business saw a total of 34,700 contracts traded daily, corresponding to daily revenue of approximately $4.9 million.
Hood House subsequently disclosed its statistical methodology:
- Rothera (primarily hosting World Cup-related markets) achieved a daily trading volume of 137 million contracts, corresponding to a transaction value of approximately $47 million;
- In comparison, Kalshi's total daily trading volume was approximately 1.5 billion contracts, corresponding to a transaction value of about $416 million; excluding World Cup-related markets, Kalshi's volume was approximately 1 billion contracts, with a transaction value of about $260 million;
- Considering that trading volume contributed by Robinhood users still accounts for an estimated 20% of Kalshi's non-World Cup volume (a conservative estimate), this means approximately 210 million contracts and $52 million in transaction value from Kalshi's non-World Cup event contracts were completed through Robinhood.
Based on this, Hood House further made an aggressive projection, stating that if this growth rate continues, Robinhood's prediction market business has the potential to achieve an annual revenue scale of $1 billion this year. This figure even surpasses Robinhood's historical peak in cryptocurrency-related revenue, which was approximately $900 million achieved in 2025.
Kalshi's Countermeasure: Finding New Channels
Facing the rapid rise of Rothera, Kalshi has clearly recognized the problem.
For Kalshi, Robinhood was both a partner and one of its most important sources of traffic. However, as Robinhood begins migrating more and 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 disclosed that Kalshi has begun contacting multiple investment banks for early, informal discussions regarding a potential future IPO. More notably, Kalshi has presented these investment banks with a clear requirement: if they wish to qualify as underwriters for the future IPO, these institutions need to prioritize integrating their systems with Kalshi's technology, allowing their institutional clients to directly participate in trading event contracts on the Kalshi platform.
In other words, Kalshi is leveraging the IPO opportunity to seek new distribution channels, integrating prediction markets into the client networks of banks, brokerages, and other financial institutions. This might also reflect a subtle shift in the competitive landscape of the prediction market industry. In the past, the market focused on who could offer more contracts or design better products. Now, as prediction markets gradually integrate into the mainstream financial system, the competition is pivoting to another dimension: whoever controls the user entry point will more effectively control the value.
Rothera's rise has already proven the significance of distribution capabilities. Landing as the third-place entrant in the sector seemed effortless, and whether it can eventually challenge Kalshi and Polymarket doesn't appear to be a significant obstacle.
