As the legal war over how to regulate prediction markets rages on, financial institutions are embracing the industry anyway.

When Troy Dixon first suggested incorporating prediction markets into the electronic trading platform where he works, he was met with incredulity. “People told us we were crazy,” Dixon, Tradeweb’s cohead of global markets, tells WIRED. But after the company announced it was partnering with Kalshi in February, Dixon says, the mood changed dramatically. “We’ve been inundated with calls,” he says. “We have never had this kind of feedback from clients on any other announcement.”

Tradeweb, which is majority-owned by the London Stock Exchange Group, serves the traditional finance world, including institutional investors like pension and mutual funds, banks, hedge funds, and insurance companies. While most of the public debate over prediction markets is related to their sports offerings—there’s a fierce legal war underway over whether they’re really just sports betting companies—the platforms are also becoming popular among professional traders. Sophisticated investors are interested in them largely because of markets on topics like election results, the Iran war, and the price of Bitcoin. Many of them see prediction markets as forecasting tools that can be used to inform trading decisions. “We’re super excited,” Dixon says. “It’s very rare you have something this new and cutting-edge.”

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