- Company currently has prediction markets presence via Kalshi partnership
- Executive says Robinhood is open to prediction market acquisitions
- He also implied company could look inward on that front
With prediction markets booming, one of the space’s most recognizable participants may be on the hunt for acquisitions.
Robinhood Markets (NASDAQ: HOOD), which is already a prominent prediction markets player by way of a partnership with Kalshi, is open to deal-making in the event contracts arena JB Mackenzie, vice president and general manager of futures and international, told Reuters.
We as a firm are going to be looking to see if there is an acquisition that’s available,” the executive told the news agency. “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.”
Mackenzie also said in the interview that California-based Robinhood has some “really good” engineers on staff with the capabilities to build “great products.” He stopped short of saying as much, but it could be inferred from those remarks that the company go possibly develop its own prediction market.
Possible Prediction Market Targets for Robinhood
Mackenzie didn’t mention specific prediction market operators Robinhood could consider as takeover targets, but the still nascent industry is already a hotbed of takeover speculation.
Last month, reports surfaced indicating Novig, the operator of a US peer-to-peer sports prediction market, is the subject of unconfirmed takeover interest, including from Kalshi, Polymarket, and other unidentified suitors. It’s not clear if Robinhood is among the other interested parties.
What is clear is that with $4.2 billion in cash on hand as of June 30, according to official company reports, and a stock that’s up 277.56% year-to-date, Robinhood has the resources with which to make a transformative prediction markets acquisition.
Based on last week’s valuation news, Polymarket at $9 billion to $10 billion might be too pricey for Robinhood, but partner Kalshi could be affordable at $5 billion. However, it’s unlikely that either of those companies are willing sellers at the moment, but it’s also clear that Robinhood doesn’t need to a multi-billion deal to make a prediction markets splash.
Speaking of Kalshi…
In the Reuters interview, Mackenzie didn’t mention how or if a prediction markets purchase would disrupt Robinhood’s partnership with Kalshi. If Robinhood goes down that road or builds an organic event contracts platform, it could be a blow to Kalshi because by some estimates, Robinhood clients account for 25% to 35% of Kalshi volume on any given day.
Last month, Piper Sandler analyst Patrick Moley estimated that Robinhood’s prediction markets business, which splits its economics equally with Kalshi, is on pace to become a $200 million operation. That may be enough for the company to allocate more resources to the space while considering a go-it-alone approach.
There are inklings Robinhood could go that route. In late September, Mackenzie said Robinhood is examining international prediction markets expansion, but didn’t mention Kalshi as part of the equation. Following its latest funding round, Kalshi said it will soon be available in 140 countries.
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