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

Jim Esposito, President of Castle Securities, said it is absolutely possible in the future for prediction markets to provide liquidity, helping institutional investors hedge geopolitical risks.

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

Jim Esposito said Thursday at the Semafor World Economic Summit in Washington, D.C.: “We are interested in event contracts. From an industry logic perspective, this makes a great deal of sense. Institutional investors do indeed have reasons to want to use these contracts to hedge all kinds of risks.”

As one of the world’s largest stock and options market makers, if Castle Securities really enters the arena, it could effectively address pain points in prediction-market trading—insufficient trading depth and a lack of liquidity—and, as the industry moves toward the mainstream, accommodate wagers at an even larger scale. Jim Esposito said:

Will this market continue to expand and form scale? I think it’s possible. As the market gradually grows stronger, will we continue to pay attention to it, or even get directly involved? Of course it’s possible.

According to a report released earlier this week by Bernstein, as money rapidly rotates from the 2024 U.S. election cycle to contracts related to sports, crypto, the broader economy, and politics, prediction markets created an astonishing trading volume of about $51 billion in 2025, more than tripling from the year before.

Among them, two leading platforms in prediction markets—Kalshi and Polymarket—have combined trading volume of $60 billion so far this year. Optimistic analysts estimate that in 2026, total prediction-market trading volume could top $240 billion, and that the compound annual growth rate (CAGR) over the next 5 years will be as high as 80%.

Bernstein even predicts that by 2030, the annual trading volume of prediction markets will break through the $1 trillion mark. The firm believes that increasingly clear regulatory conditions, alliances with mainstream distribution partners, and structural liquidity advantages compared with traditional gambling markets are key engines driving this surge.

In recent months, although U.S. state governments have tightened their review of prediction markets—especially sports-event contracts— the U.S. Commodity Futures Trading Commission (CFTC) has taken a hardline stance, claiming that it has “exclusive jurisdiction” over prediction markets and is actively writing the rulebook for this increasingly growing industry.

The Bernstein report says that, benefited from structural limitations from traditional online sports gambling platforms, along with the fragmentation of state regulations, sports-event contracts currently lead the trading volume in prediction markets exclusively, with a market share of 62%.

However, Castle Securities is not interested in sports-event contracts. Jim Esposito said that, for Wall Street investors, the impact of geopolitical events is growing day by day, and prediction markets can serve as an excellent “hedging tool.” He pointed to the upcoming November U.S. midterm elections, saying: “That will be a key event that triggers a major earthquake in the market and could pose extremely high risk to investors’ portfolios.”

In fact, for retail trades executed through mainstream brokers such as Charles Schwab and Robinhood, a large proportion are matched and executed by Castle Securities; and Robinhood has also recently formally offered prediction market services to users by integrating the Kalshi platform. Jim Esposito said that as retail investors’ enthusiasm for prediction markets continues to heat up, “this trend is very likely to push us into the game along with the momentum.”

Jim Esposito concluded by saying that he is closely watching the developments of Kalshi and other platforms, and describing Kalshi founder Tarek Mansour as his “good buddy.” Worth noting is that Castle Securities CEO Peng Zhao personally participated in Kalshi’s financing round of up to $185 million last year.

• This article is reproduced with authorization from: 《Block Reporter》
• Original title: 《“Citadel Securities” may enter prediction markets! President: But “sports-event contracts” not up for discussion》
• Original author: Block Sister MEL