Robinhood and Susquehanna Collaborate to Launch New Exchange

Robinhood Broadens Its Reach in Prediction Markets

Robinhood has announced a strategic partnership with Susquehanna International Group aimed at expanding their footprint in the prediction markets industry. This collaboration responds to the growing popularity and demand for event-based contracts and diversified betting options.

Details of the New Exchange Initiative

The two companies plan to establish a new exchange and clearinghouse licensed by the Commodity Futures Trading Commission (CFTC). This joint venture will operate independently, offering futures and derivatives products while functioning as a Futures Commission Merchant (FCM).

Robinhood Markets will take the lead as the primary controlling partner, leveraging robust retail interest and its distribution network to support the project. Meanwhile, Susquehanna International Group will act as a foundational partner and initial liquidity provider to ensure market stability.

To enhance the platform’s capabilities, additional liquidity providers will be brought in over time to guarantee optimal execution for users. Furthermore, the venture intends to acquire the CFTC-licensed designated contract market known as MIAXdx, which will hold a 10% equity stake in this new exchange.

This development allows Robinhood to strengthen its position in the prediction markets sector, offering innovative futures and derivative products to meet customer demand efficiently.

Potential Benefits for Robinhood and Its Users

JB Mackenzie, Robinhood’s VP and General Manager of futures and international markets, expressed enthusiasm about the launch, highlighting that it builds upon the company’s existing momentum in prediction markets. He emphasized that this initiative would enhance Robinhood’s overall business capabilities and infrastructure.

According to Mackenzie, this investment will enable Robinhood to provide improved customer experiences and a broader array of innovative products.

Prediction markets have rapidly emerged as one of Robinhood’s fastest-growing revenue streams, with over a million users trading approximately nine billion event contracts within a year. The new institutional-grade exchange aims to elevate user experience while expanding the product selection available to customers.

In addition to improving user options, the exchange will offer Robinhood increased operational flexibility, enabling quicker product development and a wider range of contract offerings. The company anticipates launching the platform by 2026.

Regulatory Challenges and Industry Landscape

Despite these advancements, prediction markets face opposition from certain state regulators and industry actors who view them as forms of unregulated gambling. For example, Nevada recently secured a legal ruling that prevents Kalshi from providing its products within the state, reflecting ongoing regulatory scrutiny in this space.