Robinhood open to acquisitions as it expands into prediction markets amid surging demand

Robinhood is weighing potential acquisitions to accelerate its expansion into prediction markets as demand for event-based trading surges, a senior executive told Reuters. 

"We as a firm are going to be looking to see if there is an acquisition that’s available," said JB Mackenzie, Vice President and General Manager of Futures and International at Robinhood. "I'm always looking to see if there's something of interest; if there is, we'll pursue it and see if it's the right fit."

Robinhood launched its event contracts trading hub in March through partnerships with Kalshi - valued at $5 billion in its latest funding round - and Interactive Brokers’ ForecastEx. The company is seeking to capitalise on growing interest in the once-niche asset class, which gained momentum during the 2024 U.S. presidential election and has broadened into wagers on everything from monetary policy decisions to major sports tournaments.

Event contracts operate as binary outcome bets that pay out if a specific result occurs or expire worthless if it does not.

Competition in the sector is intensifying. Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, last week took a $2 billion stake in Polymarket, while startups such as Underdog have entered the space with their own event contract products. 

Piper Sandler estimated that Robinhood’s event contract revenue was annualizing above $200 million in September, driven by Robinhood users accounting for 25%-35% of Kalshi’s trading volumes on any given day.

"That being said, what we also know is we have really good engineers who build great products here. So what we’re going to do is try to balance the two," Mackenzie said, referring to weighing acquisitions against in-house development.

He added that Robinhood will also consider other avenues for growth, including joint ventures or partnerships instead of outright takeovers.

Shares in Robinhood have climbed 273% so far this year, lifting its market value above $123 billion and securing its inclusion in the S&P 500 index, as it seeks to evolve from a retail stock trading platform into a broader financial services firm.