The Closing Bell: Robinhood Acquires An Exchange For Prediction Market Growth; Kalshi Faces New Class Action

Roundup: Polymarket CEO Shayne Coplan will be on 60 Minutes.

Nov 28, 2025

Thanksgiving week did not slow down the news cycle for prediction markets.

On Tuesday, we learned that Robinhood and Susquehanna International Group are going to run their own prediction market after acquiring an exchange. On Thursday, news dropped of a nationwide class-action lawsuit against Kalshi.

I did a quick post at The Closing Line when the Robinhood news dropped, but let’s dig into it. The top-level details:

Robinhood and Susquehanna create a joint venture to run a prediction market (both the exchange and the clearinghouse, like Kalshi does).
To accomplish this, Robinhood and Susquehanna are acquiring a designated contract market (DCM) and derivatives clearing organization (DCO), MIAXdx.
Launch of the new exchange is expected in 2026, with the acquisition to close in Q1.

Here’s the Robinhood blog/release about the news:

Robinhood is introducing a futures and derivatives exchange and clearinghouse, deepening our investment in Prediction Markets and better positioning us to deliver innovative products to our customers.

“Robinhood is seeing strong customer demand for prediction markets, and we’re excited to build on that momentum,” said JB Mackenzie, VP and General Manager of Futures and International at Robinhood. “Our investment in infrastructure will position us to deliver an even better experience and more innovative products for customers.”

The independent exchange will be managed by a joint venture with Robinhood Markets, Inc. serving as the controlling partner and providing strong retail demand and distribution. Market making leader Susquehanna International Group has been brought on as a key partner and day-one liquidity provider, with other liquidity providers to be added to ensure the best possible execution for customers. The venture will accelerate delivery of its services by acquiring MIAXdx, a CFTC-licensed Designated Contract Market (DCM), Derivatives Clearing Organization (DCO) and Swap Execution Facility (SEF), and wholly-owned subsidiary of Miami International Holdings, Inc. (MIAX) (NYSE: MIAX). MIAX will remain invested through a strategic 10% equity stake in the exchange.

Prediction Markets have quickly become Robinhood’s fastest-growing product line by revenue. Just one year since launch, 9 billion contracts have been traded by more than 1 million Robinhood customers. By introducing a robust, institutional-grade exchange to the market, we’ll add more choices for consumers. We’ll also gain the flexibility to build faster and deliver more contracts and services to traders.

The exchange will serve Robinhood Derivatives and other FCMs, and is expected to begin operations in 2026.

And here’s the press release from the company that sold the exchange to the new venture.

There are two major sides to the story:

Robinhood fully embracing prediction markets, to the point that it wants to own the whole thing itself.
The impact to Kalshi, which gets the majority of its retail flow from Robinhood and a lot of liquidity from Susquehanna.

PayNearMe has developed the gaming industry’s first platform that is purpose-built to dramatically improve the end-to-end payment experience. It enables operators to manage the entire payment journey, for all major forms of payment and through the most popular channels. With PayNearMe, operators gain full control of the payment flow, promoting acquisition, retention and efficiency. One platform, one integration—built to solve gaming’s toughest payments problems.

Robinhood making a big move into prediction markets is perhaps very surprising and not surprising at all.

“Surprising”: Robinhood seemed content with what it was doing — using Kalshi (and to a lesser extent ForecastEx) to serve prediction markets to its new users. And CEO Vlad Tenev intimated just earlier this month that doing what Robinhood just did — competing directly with the exchanges and integrating vertically — was not something he was necessarily interested in doing.
“Not surprising”: it was clear from Q3 earnings how important Robinhood felt prediction markets are to its business now and in the future, given they were already projecting as a nine-figure category annually. And Tenev said recently “Turns out the Robinhood of prediction markets is … Robinhood.” If it viewed itself that way and saw how important the industry could be, it would seem a move like this was a fait accompli.

The vigor with which Robinhood attacked the prediction markets space would have been aggressive whether it made this move or not. But now there’s no question that Robinhood is going to try to win the space, with or without the help of other exchanges.

That brings us to the Kalshi part of the story, which is perhaps just as big. Kalshi is the de facto leader in the US prediction markets industry, and none of this seems great for Kalshi’s future. It’s a pretty good illustration of the adage “Today’s friends are tomorrow’s enemies.” But let’s take a closer look:

Robinhood is responsible for more than half of Kalshi’s volume. If all, most or some of the volume Robinhood provides moves away from Kalshi once the JV goes live, that’s undoubtedly a bad outcome for Kalshi.
- Kalshi will likely still be the main exchange that Robinhood uses in the short term. Robinhood told InGame: “Robinhood has maintained relationships with multiple exchanges since the inception of prediction markets (Kalshi and ForecastEx). Robinhood Derivatives plans to continue to partner with multiple DCM/DCO partners, supporting access to a diversity of market venues for our customers.”
- That creates some room for a range of outcomes. But if we assume that Robinhood/SIG will launch its own moneyline markets for major sports rather than routing traders through Kalshi’s markets, that would quickly kneecap much of the activity Kalshi sees via Robinhood. The median outcome would perhaps be Kalshi providing markets that the new venture won’t stand up right away. But we’ll see!
Susquehanna is a partner in the new venture and will be helping to stand up liquidity from day one. It will be doing whatever it can to make sure this endeavor works. Does providing a sizable amount of liquidity at Kalshi — now a competitor — make sense in that world? Again, we’ll see!

The fascinating question to contemplate is how bad this might be for Kalshi in the short and long term. I am loathe to speak in absolutes about anything in prediction markets, given how quickly things change. But again, other than the idea that a huge fintech company is bullish on prediction markets, you have to squint to see how this announcement in and of itself is a great outcome for Kalshi over any time horizon.

The paths to success in the space are B2B and B2C, and both offer potential upside and downside for Kalshi:

Kalshi clearly endeavors to be a B2C brand in the prediction markets space. It has had real traction in the App Store — rising as high as No. 1 in finance apps — even if it hasn’t translated to a ton of added trading volume in recent weeks. Kalshi hammers a lot of marketing channels trying to get people to sign up, deposit and bet/trade. But the realization that Robinhood is more than half of volume brings up a real question of how much of a B2C operator Kalshi actually is right now.
- Additionally, the B2C space is quickly getting crowded. Robinhood will be a competitor in a large cohort of states, as will Polymarket, whose US-facing launch appears imminent. We also have DraftKings and FanDuel launching sports and other markets soon, albeit in a smaller cohort of states. And those are just the biggest players that are launching soon. Those are some incredibly well-capitalized companies that are good at customer acquisition and retention; Polymarket appears set to undercut Kalshi on fees.
- Kalshi has raised a lot of money in recent months. It will likely need to deploy a lot of that if it wants to compete seriously in the B2C space.
I’ve advocated for the idea that Kalshi needs to lean into being a B2B operator, and I am not sure that thesis has changed. But Robinhood just becoming the exchange itself has turned things on their head a bit.
- Polymarket can now work with brokers as well as of this week. DraftKings owns its own DCM. Even Robinhood could be a competitor in this space as a DCM/DCO. Kalshi does not necessarily have this sandbox to itself, either.
- CEO Tarek Mansour several months ago said Kalshi had 20 brokers in the pipeline. Kalshi launched with PrizePicks, with fairly minimal impacts on volume at the start. And we apparently have Coinbase coming soon as a Kalshi partner. We’ll likely need to see more of those going live sooner rather than later if Kalshi is going to blunt the impact of Robinhood’s product in 2026.

Kalshi spent much of 2025 as the end boss of US-facing prediction markets. It enters 2026 facing a much different competitive landscape.

The new class-action lawsuit

I am usually not a huge fan of covering class-action lawsuits in the gaming space, because they generally exist to make lawyers rich and they don’t always mean that much in the grand scheme of things.

It’s not clear this is even a terribly well-constructed class action, and I see the lawsuits involving states and tribes as much more important to Kalshi in the micro and prediction markets in the macro.

But a class-action against Kalshi went somewhat viral (on Thanksgiving Day!) at least on Twitter, thanks to attorney Dan Wallach setting off a chain reaction of posts and stories. His tweet has been viewed a million times. (Click through if you want more details about the content of the suit, or read this summary from Front Office Sports.)

Attorney Andrew Kim (also an Event Horizon contributor) posted a quick thread on Twitter as well: “There are a lot of allegations in the complaint that have little to do with the claims.”

What I can tell you is this lawsuit accomplishes a couple of things:

Continues to underline that Kalshi is taking the brunt of things legally, as an early and biggest mover in the space.
Opens up yet another legal front for Kalshi as it fights for the survival of sports event contracts in courts around the country.

The most interesting thing to me is that it broke through on social media, and there was seemingly a lot of negative sentiment. Even a Polymarket-affiliated news aggregator got a lot of traction with the story.

The loss in the Nevada case, followed by the class-action, has seen Kalshi losing control of the narrative. That is almost as bad as losing the cases themselves. A lot of people probably won’t see what happens with the class action moving forward, but they will have seen the accusations that the lawsuit made against Kalshi.

Things I wrote about prediction markets this week

Prediction markets roundup

Polymarket featured on 60 Minutes: “As the popularity of online prediction markets grows, Anderson Cooper sits down with Polymarket founder and CEO Shayne Coplan in his first network television interview.”
In Thanksgiving NFL games, prediction platforms could win big (CNBC): “Thirty states have legalized mobile sports betting, leaving 20 states still waiting for their turn. Piper Sandler analyst Patrick Moley told CNBC that prediction markets action spikes involving teams that reside in states that haven’t legalized gambling.
- “This is going to be a big week for prediction markets,” Moley said in an interview. “You have three NFL games that are going to be played on Thanksgiving. Three of the teams that are playing are in states where sports betting is illegal. And what we’ve seen so far in the NFL season is that when you have a team that’s in a market where sports betting is illegal, we see a volume bump.”
Legal maneuvers: New Jersey entered the order dissolving Kalshi’s preliminary injunction in Nevada into its case in the Third Circuit (h/t Dan Wallach).
- Robinhood is pausing new sports event contracts in Nevada, according to a notice from the Nevada Gaming Control Board. That comes after Kalshi’s aforementioned loss in Nevada. From the notice: “In light of Judge Gordon’s ruling, the Board and Robinhood have reached an agreement in principle under which Robinhood has agreed to cease offering new sports event contracts in the State of Nevada, pending further proceedings.”
Underdog pulls out of Missouri ahead of sports betting launch (Fox2Now): “Underdog, which had heavily advertised leading up to Monday’s launch, pulled its application to operate in the Show-Me State earlier this month, the Missouri Gaming Commission said. Mike Leara, executive director of the Missouri Gaming Commission, said Underdog is looking to venture into other predictive markets that aren’t regulated by states.”
- “They have decided to go to that market,” Leara said. “It’s not regulated at any level compared to what traditional sports betting is regulated, and obviously, there’s no tax on it.”

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