Jim Esposito, the president of Citadel Securities, said that it's "certainly possible" the market-making giant could provide liquidity for the fast-growing prediction market sector, just not for sports event contracts.

"Event contracts are interesting to us," Esposito said Thursday at Semafor World Economy in Washington, D.C., where Citadel was a sponsor. "I think there's a sound industrial logic, real reasons institutional clients would want to use these contracts to hedge various risks."

Citadel Securities, one of the largest global market-makers for stocks and options contracts, could help to deepen often thinly traded prediction markets and allow larger bets as the sector goes mainstream.

"Will this market ramp and scale? I think it’s likely," Esposito said. "And as it does, will we continue to look at it and potentially get involved? Certainly possible."

Prediction markets generated around $51 billion in volume during 2025, analysts at research and brokerage firm Bernstein noted earlier this week, tripling year over year as liquidity rotated from the 2024 U.S. election cycle toward sports, crypto, macro, and political contracts.

Kalshi and Polymarket have already executed a combined $60 billion in volume so far this year, with the analysts expecting $240 billion in 2026 and an 80% compound annual growth rate over the next five years.

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Bernstein projects the sector to reach $1 trillion in annual volume by 2030, citing regulatory clarity, mainstream distribution partnerships, and a structural liquidity edge over traditional gaming markets.

No sports, just geopolitics?

Despite state-level scrutiny in recent months, particularly surrounding sports event contracts, the Commodity Futures Trading Commission has asserted that it holds "exclusive jurisdiction" over prediction markets and is seeking to write rules as the industry expands. 

The debate continued on Thursday, as CFTC Chairman Michael Selig faced heat from lawmakers during a House Agriculture Committee hearing over how he plans to oversee prediction markets and whether the CFTC has the headcount to do it.

Sports contracts currently dominate prediction market volumes at a 62% share, benefiting from the structural limitations of online sports betting platforms and fragmented state-level regulation, according to Bernstein.

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Citadel Securities is not interested in sports betting, but Esposito said that prediction markets could serve as a good hedge for geopolitical risks as such events become more important for investors, pointing to the upcoming U.S. midterm elections in November as an example.

"That's going to be a seismic event" that will present "some of the biggest risks to investors' portfolios that they're going to have to grapple with," Esposito said.

Citadel Securities already executes trades placed by retail investors through brokerages such as Charles Schwab and Robinhood, with the latter offering prediction markets via a Kalshi integration. As interest in prediction markets grows, "that would likely pull us in," he said.

Esposito added that he's following Kalshi and other platforms closely, describing Kalshi founder Tarek Mansour as a "good friend." Citadel Securities CEO Peng Zhao participated in a $185 million funding round for Kalshi last year.