Charles Schwab CEO: “Prediction markets run counter to the firm’s mission… ceding the space to Robinhood”

The CEO of major U.S. brokerage Charles Schwab said that while prediction markets have some informational value, trades that amount to sports betting do not align with the firm’s core mission.

Rick Wurster, CEO of Charles Schwab, said in an interview with The Block on the 5th (local time) that “prediction markets can offer elements that help investors, but sports betting is at odds with the company’s mission.”

He broke the role of prediction markets into three functions. “First, prediction markets provide insights into the probability of various events occurring. That can be useful information for investors,” Wurster said. “Second, they can matter for investors seeking to hedge or adjust portfolios linked to the outcomes of macroeconomic events such as inflation or employment indicators,” he explained.

He drew a clear line, however, when it comes to prediction markets structured as bets on sports results. “The third is sports betting, and that’s the part we think hardest about,” he said. “It’s a business that positions gambling, and it doesn’t fit with our core mission.”

He added that “this kind of business should be left to companies with a gambling or trading-platform character, such as FanDuel or Robinhood.”

In the U.S., prediction markets have recently expanded beyond economic indicators and political events into sports, fueling debate over regulation and business fit. Charles Schwab is seen as making clear it will stick with its existing direction centered on providing investment information and asset management.