Charles Schwab Weighs Prediction Markets as Trading Boom Draws Wall Street Interest

Charles Schwab is weighing prediction markets tied to financial events as Wall Street interest in event contracts accelerates and regulators question whether parts of the sector resemble sports betting.

Schwab President and CEO Rick Wurster said the firm is taking a hard look at prediction markets but would avoid wagers that do not fit its wealth-management focus. 

He said Schwab would likely have prediction markets at some point, while drawing a line between financial events and sports, politics or pop culture.

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Wurster’s comments came as Schwab reported total client assets reached US$11.77 trillion (AU$16.48 trillion), core net new assets totalled US$140 billion (AU$196 billion), new brokerage accounts reached 1.3 million and daily average trades hit a record 9.9 million.

Wurster said Schwab would stay away from gambling-style markets, which is a key distinction here; prediction markets can range from contracts on interest rates, economic data and elections to sports outcomes and entertainment events.

Regulatory Pressure Builds

However, regulatory scrutiny is rising. CFTC Chair Michael Selig told a House Agriculture Committee hearing on April 16 that the agency has a “zero-tolerance policy” for insider trading, fraud or manipulation in prediction markets.

The CFTC even took three states to court for allowing prediction markets to operate freely.

Similarly, Senators Adam Schiff and John Curtis introduced a bipartisan bill on March 23 that would prevent Kalshi and Polymarket from offering sports event contracts or casino-style games, with Schiff arguing those products are sports bets under a different name.

The scale of activity basically says it all. Yahoo Finance cited Dune dashboard data showing sports wagers made up 78% of Kalshi’s weekly volume at US$2.7 billion (AU$3.78 billion), a figure that highlights both commercial demand and the regulatory risk around product design.

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