Global financial companies Charles Schwab and Citadel Securities have publicly mentioned the possibility of entering the rapidly expanding prediction market. Both companies, however, drew a line at sports-related products.

Cointelegraph, a blockchain media outlet, reported on April 19 that Charles Schwab has been the most active in signalling the possibility. Rick Wurster (릭 워스터), chief executive of Charles Schwab, said on a conference call with investors that the company is likely to offer prediction markets in the long term. He said customer interest in prediction markets has not been high, but added it is something the company should examine closely and would not be difficult to offer.

Charles Schwab set out clear criteria on what type of prediction markets it would enter. Wurster said it will not pursue areas such as sports, politics and pop culture that do not align with long-term wealth-building strategies. He said those areas do not match the direction the company is pursuing, and that performance statistics for participants generally show heavy losses.

Citadel Securities is also weighing whether to participate while watching market conditions. Jim Esposito (짐 에스포지토), president of Citadel Securities, said at a Semafor event in Washington last week that he is monitoring how prediction markets are developing. He said liquidity is not sufficient yet, but added the market is likely to expand and it is entirely possible for the company to be involved.

Citadel Securities also drew a line at sports. Esposito said it is not considering sports markets at all for now and has no plans to enter that area. He said some event contracts could be a tool for individual and institutional clients to hedge risk in investment portfolios. Citing contracts tied to events such as elections that could affect markets, he said they have use cases and an industrial logic because they can separate and more clearly hedge some of the key risks an investor portfolio may face.

Prediction markets have seen rapid growth in recent months. Token Terminal data show the combined monthly trading volume of major platforms such as Kalshi and Polymarket hit a record $23.6 billion in March. As the market expands faster, traditional finance has begun to review the possibility of participating.

Regulatory uncertainty remains large. Prediction market platforms are facing legal challenges from regulators in some U.S. states over allegations they offered unlicensed sports betting. Some in the federal Congress have also signalled a crackdown on prediction markets, saying safeguards against insider trading are insufficient.

Against this backdrop, the approaches by Charles Schwab and Citadel Securities can be summed up as excluding sports-style products and focusing on event contracts tied to investment purposes. Market growth has been confirmed, but with regulatory boundaries still unclear, the likelihood of actual entry by traditional financial firms appears likely to be determined by liquidity and the extent of institutional and regulatory arrangements.