Traditional finance giants Charles Schwab and Citadel Securities are both exploring entry into the prediction market sector. Schwab’s CEO indicated the firm is likely to offer such markets but would avoid sports, politics, and pop culture bets. Meanwhile, Citadel Securities’ president confirmed the firm is monitoring the space and sees potential for using event contracts as hedges against investment risks.
Two major traditional finance players are evaluating moves into the fast-growing prediction market industry. Charles Schwab CEO Rick Wurster told investors that prediction markets are an area the company would *“take a hard look at, and it would be quite straightforward for us to offer.”*
He stated a potential Schwab offering would avoid areas like sports and politics to align with its wealth-building focus. Wurster said, “Prediction markets that are not aligned to that are not something that we want to pursue.”
Separately, Citadel Securities president Jim Esposito said the firm is “absolutely keeping an eye on developments” in prediction markets. He noted the current lack of liquidity but suggested the market is likely to scale.
Esposito said Citadel was not looking at sports markets but signaled interest in certain event contracts. He highlighted their potential use as a hedge for portfolio risks, such as those from elections.
Prediction markets like Kalshi and Polymarket have seen explosive growth recently. According to Token Terminal, the platforms saw a combined record monthly trading volume of $23.6 billion in March.
These platforms have also faced regulatory scrutiny in the United States. Some state regulators have accused them of offering unlicensed sports betting, while federal lawmakers have vowed to crack down over insider trading concerns.
