Who Actually Runs Your Prediction Market Trades? A Complete Infrastructure Guide
When you trade on Robinhood, Coinbase, FanDuel, or DraftKings, a different exchange is often running your actual trade. The complete infrastructure map for 2026.
When you open Robinhood, Coinbase, FanDuel Predicts, or DraftKings Predictions to place a trade, you might assume the app you downloaded is the one executing your contract. In most cases, that assumption is wrong.
Most consumer-facing prediction market apps operate as broker wrappers — they take your order, route it to a separate, federally regulated exchange, and add their own fee on top. The exchange you've never heard of is the one actually listing the contract, matching your trade, clearing your position, and settling your payout.
This matters more than you'd think. It affects your fees, which markets are available to you, who handles your account holds, where support tickets actually go, and what happens when a state AG comes after the platform. Understanding the infrastructure behind the app is the most underrated thing a prediction market trader can know.
Here's who's actually running your trades.
Two Business Models: Exchanges vs. Brokers
The US prediction market industry has split into two distinct business models.
Exchanges own the full stack. They list the contracts, match the buyers and sellers, clear and settle the trades, and maintain custody of funds. They are CFTC-designated contract markets (DCMs) and often hold a derivatives clearing organization (DCO) license too. Kalshi, Polymarket US (QCX LLC), Interactive Brokers' ForecastEx, and Sporttrade are all licensed exchanges. PredictIt operates under a CFTC no-action letter with a self-operated platform — it is not a federally licensed exchange.
Brokers (often called futures commission merchants, or FCMs) send your order to someone else's exchange. They build a front-end app, acquire customers, and earn a margin by adding a fee on top of the underlying exchange's fee. Robinhood, Coinbase, Webull, FanDuel Predicts, and DraftKings Predictions are all operating as brokers — at least in part.
The distinction matters because when something goes wrong, the accountability is split. The broker handles your account and the customer experience. The exchange is legally responsible for contract execution, settlement, and resolution disputes.
The Kalshi Network: The Dominant B2B Exchange
Kalshi is the biggest winner of the infrastructure layer battle — at least for now.
Founded in 2018 and the first federally regulated event contract exchange in the US, Kalshi operates its own CFTC-registered DCM and DCO. What most users don't realize is that Kalshi's exchange doesn't just serve Kalshi.com customers — it powers the prediction market products inside several of the largest consumer apps in the country.
Robinhood routes to Kalshi. When you trade on Robinhood's prediction markets, your contracts are listed on Kalshi's exchange. Kalshi and Robinhood split a $0.02 per contract fee, with each taking $0.01. According to Sportico, Robinhood's customer traffic has represented more than half of Kalshi's total trading volume since the Robinhood launch in March 2025. That's a staggering amount of volume flowing through Kalshi's pipes without most Robinhood users knowing Kalshi is involved.
Coinbase routes to Kalshi. On January 28, 2026, Coinbase launched prediction markets nationwide, powered by Kalshi. The product, called Coinbase Predict, operates through Coinbase Financial Markets (CFM) — a CFTC-registered FCM and NFA member — which routes all orders to KalshiEX LLC (Kalshi's CFTC-designated contract market). Yahoo Finance covered the launch and confirmed Coinbase users can access all of Kalshi's markets through the Coinbase interface.
Webull and others route to Kalshi. The Webull prediction market product charges $0 commission and a $0.01 Kalshi exchange fee — a transparent signal of the Kalshi-powered routing underneath.
This B2B model is exactly what Kalshi's CEO Tarek Mansour said he was building toward: "Kalshi has the potential to be the NYSE of prediction markets," he told reporters, citing a pipeline of broker partnerships. Alongside Robinhood and Coinbase, Kalshi has confirmed partnerships with PrizePicks and Plus500.
The Rothera Shift: Robinhood Is Building Its Way Out
The Kalshi-powers-Robinhood relationship has a visible expiration date.
On November 25, 2025, Robinhood announced a joint venture with Susquehanna International Group (SIG) to acquire 90% of MIAXdx — a CFTC-licensed DCM and DCO formerly owned by Miami International Holdings. The deal closed January 20, 2026, and the exchange was renamed Rothera LLC, according to the CFTC filing and the MIAX press release.
Once Rothera begins listing its own contracts (expected Q2 2026), Robinhood will be able to capture the full fee structure instead of splitting it with Kalshi. But Robinhood has said it will continue offering Kalshi contracts alongside Rothera contracts, so the transition is likely gradual rather than a hard cutover.
For traders, this means Robinhood is evolving from a pure broker into a hybrid operator — eventually both running its own exchange and brokering others' contracts.
The CME Group Network: The Financial Infrastructure Giant
While Kalshi built its B2B network from the prediction market space outward, CME Group — the world's largest derivatives exchange — entered from the institutional finance direction.
CME Group partnered with FanDuel and DraftKings to power their prediction market products. Both apps route contracts through CME Group's exchange infrastructure.
FanDuel Predicts launched December 22, 2025, as a standalone mobile app under a joint venture with CME Group. According to the official press release from FanDuel and CME Group, CME gets 50% of gross revenue under the arrangement. FanDuel Prediction Markets LLC is a CFTC-registered FCM and NFA member; the contracts themselves are listed on CME Group's derivatives exchange. Sports contracts are available in 18 states where FanDuel does not already operate a sportsbook. Financial, economic, and commodity markets are available in all 50 states.
DraftKings Predictions launched December 19, 2025, via Gus III LLC d/b/a DraftKings Predictions, a CFTC-registered introducing broker and NFA member. DraftKings routes trades to CME Group's exchange. Per the Yahoo Finance launch report, DraftKings Predictions launched in 38 states. The company also acquired Railbird Exchange LLC in October 2025 and has a pending FCM upgrade application with the NFA — signaling it may eventually move to its own exchange, similar to Robinhood's Rothera play.
The CME Group model provides institutional credibility and regulatory depth, but trades off flexibility. Both FanDuel and DraftKings are constrained to the market categories CME chooses to list.
The Crypto.com CDNA Network
Crypto.com took a third infrastructure approach. Rather than partnering with an existing US exchange, the company registered its own CFTC-designated contract market: Crypto.com Derivatives North America (CDNA).
CDNA powers several consumer-facing apps:
- OG Predictions — Crypto.com's own consumer brand
- Fanatics Markets — the Fanatics collectibles and sports commerce brand
- Underdog (initially) — Underdog Predictions launched on CDNA in September 2025, though Underdog subsequently acquired Aristotle Exchange (a separate CFTC-registered DCM and DCO) in March 2026, per the BusinessWire announcement, and is transitioning toward its own infrastructure.
The Direct Platforms: No Middleman Needed
Some prediction market platforms are exchanges first, apps second. When you trade directly on these, the company is doing everything itself — listing contracts, matching trades, clearing positions, and handling settlement.
Kalshi.com — The flagship direct platform. CFTC-registered DCM and DCO since 2020. Formula-based taker fee: up to 1.75¢ per contract. 3.75-4% APY on cash and open positions. Politics markets are fee-free.
Polymarket US (QCX LLC) — Polymarket completed its acquisition of QCX LLC, a CFTC-licensed entity, and is operating the US-facing sports prediction market through QCX. The fee structure on Polymarket US sports markets is probability-based with a peak effective rate of 0.75% at 50¢ probability. Note: QCX LLC's US product is sports only. The global polymarket.com — which offers politics, economics, and all other categories — is NOT accessible to US users.
Interactive Brokers / ForecastEx — ForecastEx LLC is a CFTC-registered DCM and DCO owned by Interactive Brokers. Prediction markets are available alongside stocks, options, and futures in the IBKR platform. The fee structure is the lowest in the industry: $0 IBKR commission plus $0.01 per contract exchange fee built into the price. ForecastEx also offers yield on cash balances (3.14% APY as of March 2026).
PredictIt — PredictIt operates under a CFTC no-action letter (CFTC Letter 25-20, July 2025 revision). It is not a federally licensed exchange. (Its former operating partner, Aristotle Exchange, won its own separate CFTC exchange license in September 2025 — but Aristotle's exchange entities were sold to Underdog in March 2026, and PredictIt continued under its no-action letter framework.) PredictIt charges a 10% fee on trading profits and a 5% withdrawal fee — the highest fees among regulated prediction market platforms.
Sporttrade — Operates under state gaming licenses rather than CFTC oversight. Direct exchange model for sports contracts.
Why It Matters for Your Trades
Understanding who's actually running the exchange behind your app has real implications:
Fees Are Layered
When you use a broker app, you pay the broker's fee AND the exchange's underlying fee. Coinbase adds a markup on top of Kalshi's formula-based fee. Robinhood charges $0.02 per contract total — $0.01 to Robinhood, $0.01 to Kalshi. FanDuel charges a flat 2% of potential payout, all of which goes through the CME Group structure.
Direct platforms like Kalshi, ForecastEx, and Polymarket US eliminate the broker layer. You pay only the exchange fee.
Your Markets Depend on the Exchange
A broker app can only offer the markets its underlying exchange decides to list. Coinbase and Robinhood users see Kalshi's contract catalog — which is comprehensive. But if Kalshi were to discontinue a market type, Coinbase and Robinhood users would lose access to it simultaneously.
Support Paths Are Split
When something goes wrong — a trade stuck open, a settlement dispute, a withdrawal hold — the broker app handles your account, but the exchange handles the contract. Coinbase customer support can help with your Coinbase Financial Markets account, but a dispute about a Kalshi contract resolution may require contacting Kalshi directly. DraftKings support can handle your account, but a CME-listed contract issue may need to go to CME Group.
State Restrictions Can Hit the Exchange, Not Just the App
The 2025-2026 wave of state regulatory actions largely targeted the exchanges (Kalshi, Crypto.com), not the broker apps. When Nevada issued a preliminary injunction against Coinbase in March 2026, the action named Coinbase Financial Markets — but the underlying state objection was to the prediction market contracts themselves, which are KalshiEX-listed instruments. Traders using any Kalshi-powered app (Coinbase, Robinhood, Webull) were affected simultaneously by rulings targeting the shared underlying exchange.
Platform Infrastructure Quick Reference
| App | Your Account Is At | Contracts List On | Fee Model |
|---|---|---|---|
| Kalshi.com | Kalshi | KalshiEX (DCM) | ≤1.75¢/contract (formula) |
| Robinhood | Robinhood Derivatives LLC (CFTC FCM) | KalshiEX (current) / Rothera (Q2 2026) | $0.02/contract |
| Coinbase | Coinbase Financial Markets (CFTC FCM) | KalshiEX (DCM) | Kalshi fee + Coinbase markup |
| Webull | Webull | KalshiEX (DCM) | $0 + $0.01 Kalshi fee |
| FanDuel Predicts | FanDuel Prediction Markets LLC (CFTC FCM) | CME Group (DCM) | 2% of potential payout |
| DraftKings Predictions | Gus III LLC (CFTC IB) | CME Group (DCM) | $0.01/contract + exchange fees |
| Polymarket US | QCX LLC (CFTC FCM) | QCX Exchange | 0.75% peak (sports) |
| Interactive Brokers | IBKR LLC (CFTC FCM) | ForecastEx (DCM) | $0 + $0.01/contract |
| OG Predictions | Crypto.com | CDNA (DCM) | $0.02/contract ($1 markets) |
| Underdog | UDM LLC (CFTC FCM) | Aristotle Exchange (DCM) | $0.02/contract (flat) |
| PredictIt | PredictIt (CFTC no-action letter) | PredictIt | 10% profits + 5% withdrawal |
Frequently Asked Questions
Does it matter which exchange my trades go through?
Yes, for several reasons. The exchange determines which contracts are available, handles settlement disputes, and is the entity regulated by the CFTC. When a state takes legal action, it's often targeting the exchange, which can affect all broker apps routing through that exchange simultaneously.
If I use Robinhood, are my contracts on Kalshi?
Currently, yes — the majority of Robinhood prediction market contracts are listed on Kalshi's exchange. Robinhood now owns the Rothera exchange (via its JV with Susquehanna International Group), which is expected to begin operations in Q2 2026. After that, Robinhood plans to offer contracts from multiple exchanges — Kalshi, Rothera, and potentially others.
Can I get better fees by going directly to Kalshi instead of Coinbase?
Potentially. Coinbase adds a broker fee on top of Kalshi's underlying fee, but Coinbase doesn't publicly publish a formula for its markup. The best way to compare is to check the per-trade fee shown in the trade preview screen on both apps for the same contract.
What's the difference between Polymarket.com and Polymarket US?
Polymarket.com (the global version, running on the Polygon blockchain) is NOT accessible to US users and offers politics, economics, entertainment, and all other categories. Polymarket US runs through QCX LLC (a CFTC-licensed entity Polymarket acquired), offers sports contracts only, and is the version US users can legally access.
Is Interactive Brokers a good option for prediction markets?
Interactive Brokers offers prediction markets through ForecastEx, its CFTC-registered subsidiary. The fee structure ($0 IBKR commission + $0.01/contract) is among the lowest available. It's a compelling option for traders who already use IBKR for stocks or futures and want to consolidate.
Conclusion
The prediction market industry has built itself on two layers: consumer apps that compete on user experience, and exchanges that compete on liquidity, market depth, and regulatory reliability. Knowing which layer your trades are actually happening on isn't just for the financially curious — it affects your fees, your support experience, and your exposure to regulatory risk.
Right now, Kalshi's exchange powers more prediction market volume than any other infrastructure provider in the US. But the landscape is shifting quickly. Robinhood is building Rothera. DraftKings acquired Railbird. Underdog bought Aristotle Exchange. Each of these companies is making the same bet: that owning the exchange infrastructure, not just the front-end brand, is where the long-term value gets captured.
For an up-to-date look at each platform and its current fee structure, see predictionmarkets.us.
Sources & Verification
- Kalshi provides infrastructure for Robinhood, Coinbase, Webull: Sportico, April 8, 2026 — verified April 12, 2026
- Coinbase prediction markets launch (Kalshi-powered): Yahoo Finance, January 28, 2026 — verified April 12, 2026
- Robinhood acquires MIAXdx (Rothera JV): MIAX PR Newswire — verified April 12, 2026
- Rothera CFTC filing: CFTC Industry Filings — verified April 12, 2026
- FanDuel Predicts + CME Group launch: FanDuel/CME Group PR Newswire, November 12, 2025 — verified April 12, 2026
- DraftKings Predictions launch (38 states): Yahoo Finance launch announcement — verified April 12, 2026
- Underdog acquires Aristotle Exchange (CFTC DCM+DCO): BusinessWire, March 9, 2026 — verified April 12, 2026
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