Rumors suggest "Castle Securities" may enter the prediction market! CEO: But we're not interested in sports event contracts.

Citadel Securities President Jim Esposito stated that in the future, it is definitely possible to provide liquidity for prediction markets to assist institutional investors in hedging geopolitical risks.

Wall Street market maker giant “Citadel Securities” President Jim Esposito said that the company is “absolutely likely” to provide liquidity for prediction markets in the future, but is not interested in sports betting contracts.

On Thursday, Jim Esposito said at the Semafor World Economic Summit held in Washington, D.C.: “We are very interested in event contracts. From an industry logic perspective, this makes a lot of sense; institutional investors indeed have reasons to use these contracts to hedge various risks.”

As one of the world’s largest market makers in stocks and options, if Citadel Securities truly enters the game, it could effectively address the pain points of insufficient trading depth and liquidity in prediction markets, and accommodate larger-scale bets as the industry moves toward mainstream adoption. Jim Esposito explained:

Will this market continue to expand and grow in scale? I think it’s possible. As the market gradually grows stronger, will we continue to pay attention and even participate directly? Of course, that’s also possible.

According to a report released earlier this week by Bernstein, as funds rapidly rotate from the 2024 U.S. election cycle into contracts related to sports, cryptocurrencies, macroeconomics, and politics, prediction markets created approximately $51 billion in astonishing trading volume in 2025, tripling compared to the previous year.

Among them, the two leading platforms in prediction markets, Kalshi and Polymarket, have a combined trading volume of $60 billion so far this year. Analysts are optimistic that the total trading volume of prediction markets will reach $240 billion by 2026, with a compound annual growth rate (CAGR) of up to 80% over the next five years.

Bernstein even predicts that by 2030, the annual trading volume of prediction markets will surpass $1 trillion. The firm believes that the increasingly clear regulatory environment, alliances with mainstream channels, and the structural liquidity that offers advantages over traditional betting markets are key drivers fueling this surge.

In recent months, despite the increasingly strict scrutiny of prediction markets (especially sports contracts) by U.S. state governments, the U.S. Commodity Futures Trading Commission (CFTC) has firmly stated that it has “exclusive jurisdiction” over prediction markets and is actively working to establish rules for this rapidly growing industry.

The Bernstein report pointed out that, benefiting from the structural limitations of traditional online sports betting platforms and the fragmentation of state regulations, sports event contracts currently dominate prediction market trading volume, accounting for 62% market share.

However, Citadel Securities is not interested in sports event contracts. Jim Esposito said that for Wall Street investors, the influence of geopolitical events is increasing day by day, and prediction markets serve as an excellent “hedging tool.” He cited the upcoming U.S. midterm elections in November as an example, noting: “That will be a key event that could trigger a major market upheaval and pose significant risks to investors’ portfolios.”

In fact, a large proportion of retail trades placed through mainstream brokers like Charles Schwab and Robinhood are executed by Citadel Securities; recently, Robinhood has also integrated the Kalshi platform to officially offer prediction market services to users. Jim Esposito stated that as retail enthusiasm for prediction markets continues to rise, “this trend is very likely to push us further into the game.”

Finally, Jim Esposito added that he is closely monitoring the developments of Kalshi and other platforms, describing Kalshi founder Tarek Mansour as his “good buddy.” Notably, Citadel Securities CEO Peng Zhao personally participated in a $185 million funding round for Kalshi last year.

• This article is reprinted with permission from: “BlockBeats”
• Original title: “Citadel Securities May Enter Prediction Markets! President: But ‘Sports Contracts’ Off the Table”
• Original author: Block Sister MEL