Wow! @RobinhoodApp now earns more from prediction markets than from stocks or crypto.
The only asset class that earns more is options.
Event contracts did $156m against $129m for equities and $100m for crypto, which fell 38%.
Prediction markets are now 20% of everything Robinhood earns from trading. A year ago it was 2%.
The World Cup final was on 19 July, so the knockout rounds sit in Q3, and the NFL season starts in September. The run rate is $624m before either of those. So expect that number to rise.
Revenue per contract fell to 1.15 cents from 1.18, and the line grew 50% anyway.
Rothera is why.
In June, Robinhood switched on Rothera, its own exchange and clearinghouse, bought in a joint venture with Susquehanna. Now it can route World Cup contracts to its own venue instead of a partner's. Kalshi used to take the bulk of the flow. Now it takes player props and parlays.
The strategy is to rent the license to get live quickly, learn the flow, then buy the license.
My optimistic read is that people come for the speculation and stay for the investing and there is at least some evidence for it. Gold is at 4.8m subscribers up 39%, net deposits hit a record $22bn, and equity revenue nearly doubled. The non-speculative revenue line items ARE growing.
My worry is that for a substantial portion of the user base, it never happens, and Robinhood is simply very good at monetizing speculation.
Rothera earns nothing when a customer holds. It earns when they trade.
The only asset class that earns more is options.
Event contracts did $156m against $129m for equities and $100m for crypto, which fell 38%.
Prediction markets are now 20% of everything Robinhood earns from trading. A year ago it was 2%.
The World Cup final was on 19 July, so the knockout rounds sit in Q3, and the NFL season starts in September. The run rate is $624m before either of those. So expect that number to rise.
Revenue per contract fell to 1.15 cents from 1.18, and the line grew 50% anyway.
Rothera is why.
In June, Robinhood switched on Rothera, its own exchange and clearinghouse, bought in a joint venture with Susquehanna. Now it can route World Cup contracts to its own venue instead of a partner's. Kalshi used to take the bulk of the flow. Now it takes player props and parlays.
The strategy is to rent the license to get live quickly, learn the flow, then buy the license.
My optimistic read is that people come for the speculation and stay for the investing and there is at least some evidence for it. Gold is at 4.8m subscribers up 39%, net deposits hit a record $22bn, and equity revenue nearly doubled. The non-speculative revenue line items ARE growing.
My worry is that for a substantial portion of the user base, it never happens, and Robinhood is simply very good at monetizing speculation.
Rothera earns nothing when a customer holds. It earns when they trade.
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