Robinhood has bought an equity stake in Crypto.com and its prediction market spin-off OG, which owns an exchange that executes sports event contracts. It already co-owns a competing exchange, Rothera, alongside Susquehanna and Miami International Holdings. Sportico’s Dan Bernstein describes a company holding positions in two venues that compete for the same wagers, and reporting a rationale that is unusually candid about why brokerage apps want to own the plumbing.
The stated reason is fees and communication. Robinhood’s JB Mackenzie, who runs futures and prediction markets for the firm, said the tie-up lets it offer customers lower fees when routing to OG’s exchange than to unaffiliated ones, and that the equity relationship means “they listen to you a little bit more.” The same article records what that is worth in practice.
A settlement that had to be undone
Three days before the deal was reported, Robinhood brokered college football bets through Kalshi on Western Michigan at Michigan. Kalshi resolved the game as a road win before referees put a second back on the clock, at which point Michigan completed a Hail Mary to win. Bets that had already been settled one way were settled on a different result after the fact. Sportico notes that while the same thing could happen on an affiliated exchange, “there’s some extra comfort for Robinhood when working with Rothera and now OG’s exchange given the ongoing dialogue between companies.”
That is the operational reality of a market that has been running at national scale for less than two years. Sports exchange betting under federal oversight only began in December 2024. The venues deciding when a market pays out are private companies, and the customer has no standing in the resolution decision — a design that matters more as volume concentrates.
What the new exchange adds
OG’s exchange offers bets Rothera’s team has chosen not to take, including prop bets on player statistics. Sportico’s example: a wager on Bills quarterback Josh Allen throwing for at least 300 yards. Player-stat props are the product category most closely tied to the harassment of individual athletes, and they are precisely the inventory that becomes reachable for a large brokerage’s customers when the brokerage takes an equity position in the venue that lists them — while sitting outside the app that had declined to offer them.
The deal also puts more order flow behind a handful of venues. OG’s exchange executes bets for FanDuel Predicts and is picking up routing from Underdog, which Crypto.com pays for order flow. Exchanges originally built for event contracts are adding perpetual futures. Crypto.com CEO Kris Marszalek predicts consolidation down to “a few venues” within 24 to 36 months, a forecast Sportico points out favours the exchange he part-owns.
The valuations, and who is positioned
OG was recently valued at $5bn in a Citadel Securities investment; Crypto.com at $15bn. Kalshi sits at $22bn and is reportedly seeking funding at $40bn; Polymarket at $20bn pre-money. These are the numbers behind the political fight over whether the contracts are gambling or financial products — a dispute in which several states and federal regulators argue the products are unlicensed betting, and 44 states have lined up against the federal claim of exclusive authority.
Robinhood did not disclose the size of its stake or the share of wagers it will broker for OG. What is disclosed is enough to see the shape of the market: a small number of federally registered exchanges, distribution through consumer apps that also run sportsbooks, and resolution decisions made by the venue. The customer’s protection in a disputed payout rests on the operator’s incentives rather than on anything resembling the gaming-regulation regime that sportsbooks operate under.