# Robinhood **Robinhood Markets** is the retail brokerage founded in April 2013 by **Vlad Tenev** (CEO) and **Baiju Bhatt** and based in Menlo Park. It turned the stock app into a gamified everything-market: commission-free stocks, then options, crypto, and since 2025 event betting inside a brokerage account. It went public on July 29, 2021 at $38 a share and joined the S&P 500 on September 22, 2025, replacing Caesars Entertainment. The vault's interest is the last step. A regulated broker now offers sports betting to young, mostly male customers in states where sportsbooks are illegal, and is in court in several states over it. ## The business model: payment for order flow Robinhood does not charge commissions. It sells its customers' orders to market makers, chiefly [[Citadel]] Securities, which pay for the right to fill them. Regulators have repeatedly found the disclosures wanting: - **SEC, December 2020:** $65 million over how it disclosed payment for order flow. - **FINRA, June 2021:** about $70 million, then FINRA's largest penalty ever. - **Massachusetts:** a December 2020 complaint that the app "gamified" trading ended in a **$7.5 million** settlement in January 2024. - **FINRA, March 2025:** a further $26 million plus $3.75 million in restitution over anti-money-laundering and supervision failures (one source). ## GameStop On January 28, 2021, at the peak of the [[GameStop Short Squeeze]], Robinhood restricted buying of the meme stocks after its clearinghouse raised its collateral demands. Users accused it of protecting Citadel, which also backed the short side through Melvin Capital. Tenev testified to the House Financial Services Committee on February 18, 2021. ## Prediction markets - **2025: on Kalshi.** Robinhood launched event contracts in March 2025 with March Madness, on [[Kalshi]]'s exchange. It quickly became Kalshi's largest channel: more than half of Kalshi's volume in Q2 2025 (about $1 billion of $1.87 billion), falling to about a third by September (one source). By November 2025 more than a million customers had traded 9 billion contracts. - **2026: its own exchange.** A joint venture with [[Susquehanna International Group]], the trading firm of Republican megadonor [[Jeff Yass]], bought 90% of MIAXdx (formerly LedgerX). The deal was announced in November 2025 and closed on January 21, 2026. Renamed **Rothera**, the exchange went live around the start of June 2026, which moves Robinhood off Kalshi. In Q2 2026 event contracts earned **$156 million** in revenue on a record of about 13 to 13.6 billion contracts (Fortune and Yahoo differ). - **The states.** New Jersey (March 2025), Nevada (March 2025), Connecticut (September 11, 2026) and Ohio (October 2, 2026) have all sent cease-and-desist orders. Robinhood lost in Nevada's federal district court in November 2025 and in the Ninth Circuit on August 28, 2026. It petitioned the Supreme Court on September 10 ([[Robinhood Derivatives v. Dreitzer]], No. 26-338). See [[KalshiEX v. Flaherty]]. ## Politics and Tenev Robinhood gave **$2 million** to the Trump–Vance inaugural committee in December 2024. It is a founding member of the [[Coalition for Prediction Markets]]. Whether it gives to [[Fairshake PAC]] is not established; FactCheck.org's 2026 list of Fairshake's top donors does not include it. Tenev also co-founded **Harmonic**, a mathematical-reasoning AI company, which raised $120 million at a $1.45 billion valuation in November 2025. ## See Also - [[Prediction Markets and Gambling Sector]] · [[Sports Betting]] · [[Prediction Markets]] - [[Kalshi]] · [[Citadel]] · [[Ken Griffin]] · [[GameStop Short Squeeze]] - [[Susquehanna International Group]] · [[Jeff Yass]] · [[Coalition for Prediction Markets]] - [[Michael Selig]] · [[CFTC]] · [[Cryptocurrency Sector]] · [[Fintech Sector]]