Robinhood invests in Crypto.com prediction market spin-off

Robinhood has acquired an equity stake in OG, a prediction market exchange recently spun off from Crypto.com. The move adds a second major exchange partner to Robinhood's portfolio, following its existing 45% ownership in Rothera. Robinhood did not disclose the size of the investment or the specific percentage of wager volume it will route through OG. The company stated that the investment is additive to its current operations rather than a replacement for Rothera.

The acquisition creates a strategic link between Robinhood and the underlying exchange infrastructure of OG. Crypto.com, which retains a relationship with the exchange after the restructuring, was valued at $15 billion. OG itself was valued at $5 billion in a recent investment by Citadel Securities. This valuation includes the prediction market application and the exchange technology. Robinhood will continue to use Rothera for a significant portion of its prediction market activity.

Recent performance shapes investment logic

Rothera demonstrated strong performance during the World Cup in July. The exchange briefly surpassed OG's predecessor in betting volume among U.S. prediction markets. Robinhood cited this rapid volume growth as a key factor in its positive assessment of the sector. The company praised Rothera for onboarding users with minimal technical issues shortly after its relaunch. This track record influenced the decision to expand into a competing platform.

Equity stake lowers costs and risk

Robinhood's vice president for futures and prediction markets stated that the equity tie allows for lower customer fees. Routing bets through an affiliated exchange reduces costs compared to unaffiliated partners. The stake also fosters closer communication between the companies. This alignment helps resolve logistical issues, such as standards for how bets are settled. A recent error involving a college football bet on a third-party exchange highlighted the need for better coordination.

Market expansion continues in prediction markets

The number of federally approved prediction market exchanges in the United States is increasing. Robinhood previously brokered bets for Kalshi and ForecastEx without owning equity in those entities. The new deal with OG marks a shift toward deeper vertical integration. This strategy mirrors the company's approach with Rothera. According to GN markets/crypto (en-US), the move reflects a broader industry trend toward consolidation and partnership. Robinhood aims to offer a wider variety of wagers, including player stat bets not currently available on Rothera.