Kalshi Investor Schwab Staying Abreast of Prediction Market Developments
Charles Schwab, the brokerage company that invests in Kalshi, stated it is keeping informed on advancements in the prediction markets sector, but it has no intentions to participate in that field in the short term.
The remarks from the financial services firm to InvestmentNews came after Kalshi co-founder and CEO Tarek Mansour stated at a May conference that his company’s products might soon be accessible on platforms where investors review their 401(k) accounts.
Schwab ranks among the largest 401(k) providers in the US and is an investor in Kalshi — a pairing that fueled speculation that Mansour might have suggested that Schwab or a similar firm could be among the trading houses introducing prediction markets to its clients.
In February 2021, Charles Schwab participated alongside Sequoia Capital, Henry Kravis, SV Angel, Neo, and YC Continuity in a $30 million funding round for Kalshi. Casino.org contacted Schwab regarding the prediction markets matter, but did not receive a response.
Clarifying Mansour’s Remarks on 401(k)
During last month's Solana Accelerate conference, Mansour suggested that the yes/no contracts provided by Kalshi and other prediction market platforms might one day be included as investment options in 401(k) plans.
"I think by the end of the year, we’re projecting another maybe five to six brokers, and I think within the next year and a half I would say most mainstream financial brokerages like where you have your 401(k)s and others will have access to Kalshi’s products or prediction markets in app,” Mansour said at the conference.
Kalshi acted swiftly to clarify the CEO’s remarks, emphasizing that he meant more brokerage firms allowing individuals to view their 401(k) balances could include prediction markets, rather than suggesting that derivatives would be available within the retirement accounts.
Kalshi has partnerships with Robinhood and Webull, but neither firm dominates the 401(k) sector. Crypto.com, a cryptocurrency exchange operator, also provides event contracts, leading to speculation that Coinbase Global may ultimately introduce event contracts on its platform.
What 401(k) Providers Might Adopt Kalshi and Others
The sub-header mentioned above pertains to firms that provide 401(k)s and trading platforms that might incorporate yes/no contracts into their larger offerings of trading tools. It does not pertain to providing derivatives in retirement plans.
Examining the biggest 401(k) providers apart from Schwab that offer traditional brokerage and trading services, Vanguard, while it hasn't made any statements regarding this, is likely a “no” concerning prediction markets. The well-known conservative asset manager forbids its clients from purchasing Bitcoin exchange-traded funds (ETFs) on its platform.
Fidelity, a major player in the 401(k) space, is notably more open to crypto than Vanguard, suggesting it might explore prediction markets later, although it hasn’t officially stated that goal.
Recently, there have been rumors that Morgan Stanley’s E*Trade, which also operates in the employer-sponsored retirement plan sector, will provide cryptocurrency trading services to clients next year. That might indicate a readiness to look into prediction markets later on, but the company has not addressed this publicly.
