Schwab CEO says prediction markets can aid investors, but sports betting is 'counter to our mission'

Charles Schwab CEO Rick Wurster says prediction markets tied to economic and financial outcomes could offer useful signals for investors, but he drew a clear line against sports betting, calling it inconsistent with the brokerage’s core mission.

Speaking with Yahoo Finance’s Brian Sozzi on Thursday, Wurster said prediction markets serve three distinct functions, only two of which Schwab sees as "making sense for investors."

“The first is that prediction markets offer you insights into the probability of different events,” Wurster said. “As an investor, that information is good to know about.”

He added that Schwab could eventually make such probability data available directly to clients, even if it doesn’t operate a market itself.

A second category, markets tied directly to financial outcomes such as inflation or employment reports, can also serve a purpose for investors looking to hedge or position portfolios around macroeconomic events, Wurster said.

“If this inflation report comes in hot, I'm going to get hurt, so I want to hedge myself,” he explained, noting such contracts could make sense within an investing framework even if they still carry speculative elements.

But Wurster was blunt about the third category: sports betting.

“That’s something we really struggle with and is counter to our mission,” he said. “People generally don’t get better off in their financial life via gambling.”

Schwab, he said, prefers to leave that business to firms positioning themselves as gambling platforms. “We’ll leave it to the FanDuels and the Robinhoods and others that are positioning themselves as gambling firms,” Wurster said.

Prediction markets grow, regulators debate oversight

Wurster's comments come as prediction markets surge in popularity while drawing fresh regulatory scrutiny in the U.S.

Earlier this week, the Commodity Futures Trading Commission withdrew a Biden-era proposal that would have banned political event contracts, marking a shift toward allowing regulated event markets to operate under federal oversight. CFTC Chairman Michael Selig said the agency would instead pursue a framework focused on supporting “lawful innovation.”

At the same time, state regulators are increasingly challenging prediction market offerings tied to sports. Nevada’s gaming regulator recently sued Coinbase, arguing the exchange’s sports-related event contracts amount to unlicensed betting under state law.

Despite the regulatory clashes, volumes across platforms continue to climb. Combined monthly trading on major venues Kalshi and Polymarket rose from roughly $2 billion last summer to nearly $17.5 billion in January, according to The Block data, with sports contracts accounting for the majority of activity.

Crypto.com this week also spun out its own standalone prediction markets app ahead of the Super Bowl, reinforcing how exchanges see event-based trading as a fast-growing business line.

Wurster said that if Schwab were ever to move into prediction markets more directly, it would do so cautiously and within its broader investor-first framework.

“The main thing is to give our investors the information,” Wurster said, adding that any offering would need to fit alongside Schwab’s emphasis on financial planning, research, and client support.