Wall Street is already betting on prediction markets

When Troy Dixon I suggest first merging Prediction markets At the electronic trading platform where he works, he is met with skepticism. “People told us we were crazy,” Dixon, co-head of global markets at Tradeweb, tells WIRED. But after the company announced its partnership with Calci in February, Dixon says, the mood changed dramatically. “We were inundated with calls,” he says. “We have never received this kind of feedback from customers on any other ad.”

Tradeweb, which is majority owned by the London Stock Exchange Group, serves the traditional finance world, including institutional investors such as pension funds, mutual funds, banks, hedge funds and insurance companies. While most of the public discussion about prediction markets relates to their mathematical offerings, there is fierce controversy Legal war Whether these are just sports betting companies is currently being determined, and the platforms are also becoming popular among professional traders. Sophisticated investors are interested in them largely because of the markets covering topics such as Election results, Iran warAnd the price of Bitcoin. Many of them view prediction markets as predictive tools that can be used to inform trading decisions. “We’re very excited,” Dixon says. “It’s very rare to have something new and cutting-edge.”

Kalci, one of the biggest players in the industry, is keen to forge closer ties with the financial world. The company is already seeing billions of dollars in trading volume generated by institutional investors in markets in the climate/weather and science/technology categories, according to spokesperson Elizabeth Diana. This week, Calci announced a partnership with XP International, a Brazilian financial services company. The deal allows Brazilian clients to trade financial and political prediction markets on Kalshi through XP. In a statement, Lucas Rapiccini, director of financial products at XP Inc., described predictive market contracts as a “new asset class.”

Prediction markets are currently regulated in the United States by the Commodity Futures Trading Commission, the federal agency that oversees financial derivatives markets. Although there is A growing bipartisan push To classify predictive market events as gambling, the CFTC asserts that these platforms actually offer financial products.

For Kalci, cozying up to Wall Street may be a smart strategy. The company is facing a wave of lawsuits over its sports markets. Anything that highlights its usefulness in the world of finance will help the company make its case that it is not a hub for investing money in sports but rather A center for the future of finance. Although the vast majority of activity on its platform is still from ordinary people (known in industry parlance as retail or click traders) trying to predict the outcomes of football matches and other sporting competitions, professional traders are also increasingly present.

Some of the biggest names in finance have already jumped into the world of prediction markets. In October 2025, InterContinental Exchange, the parent company of the New York Stock Exchange, invested in its shares 2 billion dollars In Polymarket, Kalshi’s biggest competitor. Jump Trading, a high-frequency trading company, has acquired a stake in both Kalshi and Polymarket in exchange for providing both companies with market making services. (Market makers buy and sell contracts instantly, and are essential for derivatives markets to function.) Susquehanna International Group, one of the world’s largest market makers, is currently the primary market maker for Calcchi. SIG also plans to launch its own program Forecast of market offers In cooperation with the financial technology company Robinhood, which is Hiring employees Specifically for trading in prediction markets. There are also a number of prominent brokerages that serve major banking clients, such as Clear Street and Marex planning To provide clients with access to prediction markets soon.