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At this year’s Schwab IMPACT conference in Denver, CEO Rick Wurster didn’t mince words. Standing before thousands of financial advisors, he raised a red flag about something few in his position have dared to call out: the growing overlap between investing, gambling, and prediction markets.
Wurster’s message was simple but firm — betting on Monday Night Football isn’t the same as investing in stocks and bonds. His concern is that a new generation of investors, raised on sports betting apps and event markets, is blurring that line. As he put it, “Only about 5% of people on gambling apps ever withdraw more money than they put in.”
For someone who oversees more than $11 trillion in client assets, that statistic isn’t just a talking point. It’s a warning about where modern finance might be heading.
Prediction markets: From fed bets to football
Prediction markets weren’t born in a sportsbook. They began as an academic and economic experiment — a way for people to trade contracts based on real-world outcomes, like inflation numbers or Federal Reserve decisions. The idea was to crowdsource forecasts from informed traders and create a more accurate view of the future.
Then came the entertainment layer: sports, politics, and pop culture. Once event-based contracts started covering elections, Oscar winners, and football scores, trading volume exploded. According to Robinhood, which recently launched prediction markets through its partnership with Kalshi, annualized revenue from the product climbed to more than $100 million this year.
Platforms like Kalshi, Polymarket, and Crypto.com have turned what used to be niche economic tools into mainstream entertainment. Today, roughly 90% of Kalshi’s trading volume reportedly comes from sports markets — a stat that says a lot about what’s really driving growth.
The great conflation: Gambling or investing?
Wurster’s concern isn’t about fun or risk — he’s not anti-gambling. His issue is with presentation. Financial apps are increasingly blurring the branding between “trading” and “betting,” often encouraging users to treat wagers like portfolio moves.
When Robinhood introduced football markets, for example, the company emphasized how event contracts “leverage financial market structure” rather than traditional sportsbook lines. The marketing made these wagers sound more like investing than betting. The problem? For most users, the results look the same as a losing parlay.
Prediction market operators argue that sports contracts are priced through a marketplace rather than bookmaker odds. In theory, that makes them more “financial.” In reality, institutional market makers are often on the other side of those trades — much like sportsbooks. The peer-to-peer veneer doesn’t change the math: Someone wins, someone loses, and most people lose.
A generation hooked on the game
Wurster’s deeper fear centers on young investors. He worries that if the apps they use to check their portfolios also invite them to bet on NFL games, they’ll start viewing both through the same lens.
Studies already show that half of young men in the United States use gambling apps, with total sports betting handle exceeding $150 billion last year. Meanwhile, the American Gaming Association reports that legal gambling revenue continues to climb at a record pace.
Combine that with the dopamine loops of push notifications — Bet on tonight’s game? — and the temptation to treat markets like games gets hard to resist. “If you log into some financial apps on a Monday to check your balance, you’re likely to get a pop-up asking if you want to bet on Monday Night Football,” Wurster said. “The challenge I see with this is that investing over the long run pays off.”
Schwab’s strange connection to Kalshi
Ironically, Charles Schwab itself has a small stake in Kalshi, one of the most prominent CFTC-regulated prediction markets. The firm participated in Kalshi’s $30 million funding round in 2021, long before sports contracts were part of the platform. At the time, Kalshi was valued at $120 million. Today, its valuation has reportedly grown to $5 billion.
So, yes — Schwab invested early in the idea. But Wurster’s remarks make it clear that his enthusiasm has limits. Once prediction markets expanded into sports, the dynamic changed. “You can make the case that what the Fed is doing ties into investing,” he said, “but it’s hard to tie sports gambling to investing.”
Competitive rush into sports and event trading platforms
While Schwab remains cautious, its competitors are sprinting into the space. Robinhood’s prediction markets have become one of its fastest-growing products. Webull and Interactive Brokers also offer event contracts, though Interactive Brokers avoids sports-related ones.
For these companies, the appeal is obvious: Trading volume means engagement, and engagement means revenue. If just 20% of sportsbook users move to event-based trading platforms, analysts estimate that up to $8 billion in annual revenue could shift to this new market by 2030.
That kind of potential is hard to ignore, even for traditional financial firms. But Wurster believes it’s a short-term play that risks long-term trust. “To the extent that apps are blending the two and not drawing a stark contrast, I think that’s a disservice,” he said.
Protecting investors from the gamification of finance
At its core, this debate is about identity. Investing is meant to build wealth. Gambling is meant to entertain. Once those lines blur, people may start treating their retirement savings like a sportsbook account.
Financial advisors at the conference seemed to agree. Many echoed Wurster’s call for education — especially for clients’ children, who may be the first generation to see “markets” as a game of instant gratification rather than patience and compounding.
It’s not that prediction markets have no legitimate use. They can serve as hedging tools for traders or portfolio managers looking to offset risk. But that’s a niche purpose. For the average person, these products are simply bets dressed up with financial vocabulary.
The importance of clear lines between investing and betting
There’s a touch of irony in Schwab’s position — part investor in the prediction market revolution, part critic of its direction. Yet Wurster’s point stands: If Wall Street doesn’t set clear boundaries, someone else will.
He didn’t explicitly call for regulation, but his tone suggested the industry’s self-policing window might be closing. The CFTC already regulates prediction markets, but their growing overlap with sports and culture is testing those guardrails.
As Wurster put it, “We want clients to achieve better financial outcomes. If people are going to actively trade, we want them to have the most research, the best education, and timely insights from our experts. If we can apply all that, we can give them the best probability of success.”
That’s a long way from a yes-or-no bet on a football game.
