Robinhood Jumps on New Joint Venture to Expand Prediction Markets

Robinhood Markets (HOOD) traded higher in premarket after unveiling a joint venture with Susquehanna aimed at transforming its prediction markets segment into a more robust, independently operated exchange and clearinghouse.

A New Independent Exchange and Clearinghouse

Robinhood will act as the controlling partner.
Susquehanna will serve as the liquidity provider.
Operations for the exchange are expected to begin next year.
The JV will acquire 90% of MIAXdx, the derivatives exchange formerly connected to FTX.

Boosting Its Fastest-Growing Revenue Line

Robinhood said prediction markets have become its fastest-growing revenue product:

9 billion contracts traded in just one year
Over 1 million customers participating
A new institutional-grade exchange will allow Robinhood to

Build and launch products faster
Offer more event-based contracts
Capture a larger share of revenue from an expanding market
Reduce dependence on third-party platforms KalshiEx and ForecastEx

Strategic Rationale

The move gives Robinhood:

End-to-end infrastructure for event futures
Greater control over contract design and economics
A stronger competitive position as demand for prediction markets surges
Enhanced distribution leveraging its large retail customer base

Regulatory & Market Context

Robinhood’s media arm, Sherwood Media, remains independently operated.
Bank of America recently cautioned that rapid growth in prediction markets and online gambling poses emerging credit risks for some lenders.