Robinhood Says It Is "Less Excited" About Sports. Seventy Percent of Its Prediction-Market Flow Is Still Sports, and It Is Leaving Kalshi Anyway

Robinhood's prediction-market business earned $173 million in the third quarter, according to the company's October 27 results as reported by iGaming Express. That was more than six times the figure a year earlier, and it beat crypto, which fell 55% to $120 million. Customers traded 16.4 billion event contracts, seven times as many as in the same quarter of 2025. In a quarter when net income fell 14% to $476 million, event contracts were the line that grew.

On the call, the company said two things that do not obviously fit together. Chief executive Vlad Tenev said Robinhood is "less excited about doing what everyone else is doing, which is just all sports all the time." Chief financial officer Shiv Verma said that most of the flow Robinhood now sends to Kalshi will instead go to two other venues by "the end of the year into early next year": Rothera, the exchange Robinhood owns with Susquehanna, and Crypto.com's OG.com.

Read together, the two remarks look like a move away from sports betting. The numbers say otherwise. This is a broker deciding it would rather own the exchange than rent one.

Sports is still most of the business

Verma gave the split himself. In the third quarter, about 30% of event-contract activity was "non-sport," up from 15% the quarter before, according to InGame's account of the call. Non-sport doubled, which is real. But it means seven of every ten contracts Robinhood customers traded in a quarter covering the start of the NFL season were still on sports. Tenev's "less excited" line describes where he wants growth to come from, not where it comes from now.

He was specific about the target. "I think we can own the financial category," he said, "because that's a unique advantage we have." On Wednesday morning Rothera announced the first product aimed at that category. The CFTC has approved a cash-settled swap tied to a Tesla key performance indicator, which Rothera calls "the first of its kind." Contracts on earnings, active users and units delivered will follow, timed to companies' reporting dates, starting "this fall." No sportsbook can list that product, and no state gaming regulator has a claim over it. Seen that way, Tenev's remark is also a regulatory statement.

The Kalshi exit is about margin

Rothera already handled $6.4 billion of volume in the quarter and brought Robinhood $100 million in revenue, according to InGame. The coverage we have read does not say whether that $100 million sits inside the $173 million event-contract line or is counted separately, and we will not guess. What is clear is the direction. Every contract Robinhood routes to Kalshi pays Kalshi's exchange fee. Every contract it routes to Rothera keeps the exchange economics in a company Robinhood owns 45% of. Verma's phrase for the plan was blunt: Robinhood "will be getting off most of our competitors."

The choice of second venue is worth noticing. OG.com is run by the North American Derivatives Exchange, which on Monday sued Utah to keep the state from treating its sports contracts as illegal gambling, as our lead today explains. Robinhood is leaving one exchange that is in court with the states for two others in the same position.

What Kalshi loses

Less than it looks. InGame estimated in July that Kalshi carried about 60% of Robinhood's prediction-market volume, and that Robinhood accounted for less than 7% of Kalshi's. Both are estimates from a trade outlet, not company disclosures, and we do not know how they have moved since. If they still roughly hold, Kalshi loses a single-digit share of its volume over two quarters, at a time when it took $10 billion of a $14 billion weekend by Aldrin Research's count reported on Tuesday.

What Kalshi does lose is a distributor that is also becoming a rival, with Susquehanna on the other side. Susquehanna is Rothera's co-owner. Two Susquehanna trading firms are also named alongside Kalshi as defendants in Utah's October 20 state-court suit. A firm whose affiliates trade on Kalshi closely enough to be sued with it now co-owns the exchange Robinhood is moving its customers to.

The best case for the other reading

The strongest objection is that this is risk management, not margin. Tenev said it directly: "I do not think we can send all of our flow to one venue." Kalshi has sued Missouri and Louisiana this month alone, and Utah is suing it. Missouri sent cease-and-desist letters to six companies in September, Robinhood among them. A broker whose customers depend on one exchange's legal survival has good reason to spread the risk, whatever the fees.

We accept that diversification is part of it. But diversifying would mean splitting flow among outside venues. Robinhood is doing something else: moving the "vast majority" to an exchange it co-owns, with OG.com as its second. That is integration, and the fee economics are the clearest reason to do it. The reading would be wrong if Robinhood keeps sending a large share of sports flow to Kalshi past the first quarter of 2027, or if Rothera's sports listings turn out thinner than Kalshi's on the games customers actually trade. Either would show the dependence runs the other way.

What to watch: whether Robinhood's fourth-quarter release breaks out Rothera's share of event-contract volume, and whether the KPI contracts trade in size once the first ones list. If they do not, the financial category Tenev wants to own will stay a small part of a business that is still mostly sports.

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