As the legal battles between the prediction markets and traditional gambling industries continue to blaze across multiple federal courts in the US, another more covert but potentially decisive front is quietly advancing in the institutional finance sector. Last month, Kalshi co-founder Luana Lopes Lara revealed that the platform had accepted institutional client transactions ranging from twenty to thirty million dollars; by the end of March, Kalshi was approved to offer margin trading to institutional clients, marking a key step towards greater institutional adoption of prediction markets. Meanwhile, the company announced a partnership with Ark Invest—a well-known fund managing over $15 billion in assets, not only holding a substantial position in DraftKings but also its founder Cathie Wood personally submitted public comments to the CFTC, defining prediction markets as a natural extension of market information discovery mechanisms, with profound implications for research, risk management, and capital allocation.
From Schwab to Robinhood: The Collective Pivot of Traditional Finance
The allure of prediction markets for institutional investors is undergoing a rapid shift from skepticism to acquiescence. Charles Schwab CEO Rick Wurster publicly stated last November that he did not want young clients to equate sports betting with long-term investing, but just five months later, he acknowledged during the Q1 earnings call on April 16 that "at some point we are likely to have prediction markets." Robinhood's prediction market trading volume is expected to reach $3 billion in April, with crypto-native financial giants like Coinbase, Crypto.com, and Gemini also launching their own prediction exchanges. In terms of valuation, Kalshi has soared to $22 billion, surpassing any existing commercial gambling company, as traditional financial institutions rise from the sidelines, and crypto companies under the pressure of high volatility in the crypto market are viewing prediction markets as an extremely attractive new source of revenue. Bitcoin is currently trading below $80,000, significantly down from its peak of over $120,000 in October last year.
The Stark Contrast Between 1500 Comments and 9 Comments
Currently, there are 14 bills related to prediction markets under consideration in Congress, with 10 of them appearing just in March. The Senate unanimously passed a bill on April 30 prohibiting members and staff from participating in prediction market trading. However, Amanda Fisher, COO of the financial advocacy organization Better Markets, pointed out that the biggest concerns still focus on the CFTC's own regulation. The CFTC's rule proposal has received over 1500 comments, while other proposals received by the agency this year have the next highest number of comments at only 9. The growth driver centered on sports constitutes a profound paradox in the institutional logic: sports contracts account for more than half of the trading volume in prediction markets, yet they are precisely the most legally controversial products. If these contracts are banned, whether the institutional interest built on the massive growth of sports trading can be maintained remains unanswered. Elevate Government Affairs wrote in a comment submitted to the comment portal that target attackers on professional athletes do not distinguish between state-regulated gambling and prediction market contracts—for them, a bet is essentially the same no matter where it occurs.
PASA Official Website continues to track the dynamics of cross-penetration between the prediction market industry and institutional financial capital, noting that the subtle power struggle between traditional financial institutions, crypto enterprises, and federal regulators is evolving from a mere jurisdictional dispute into a deep game about the future shape of financial infrastructure.
————
This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
Original deep channel for gambling: https://t.me/gamblingdeep
Free data reports: @pasa_research
PASA Matrix: @pasa002_bot
PASA Official Website: https://www.pasa.news
