By Andrew Welsch

Charles Schwab's annual conference for registered investment advisors is one of the industry's largest, and it gives Rick Wurster, who became CEO at the start of 2025, a chance to address the most important forces affecting financial advisors and investors. Among Wurster's top concerns this year: the blending of investing and gambling.

"I just don't want young people in our country to think gambling on the Monday Night Football game is the same as investing in stocks and bonds, " he said.

Wurster used his speech on Wednesday to express concerns about the rise of prediction markets, which are becoming an increasingly popular method to bet on sports and other cultural and political events. Some brokerage firms, such as Robinhood, now offer customers access to prediction markets.

Wurster told 5,200 attendees that he was worried about the effects on young investors, who may conflate gambling and investing. He called on advisors to help educate investors on the difference. "The challenge I see with this is that investing over the long run pays off," he told advisors. "And you have all dramatically enhanced the financial lives of your clients by helping them identify how to invest and what to invest in."

His comments come amid a sizable increase in gambling in the U.S. Through August, commercial gaming revenue reached $51.14 billion, a 8.9% increase from the same period last year, according to the American Gaming Association. Prediction markets, which are regulated by the Commodity Futures Trading Commission, pose a threat to traditional casinos and sportsbooks in part because investors can gain access to them in states where sports gambling is otherwise illegal. They allow investors to wager on the outcome of events using yes/no contracts, and aren't subject to state taxes on gambling. Robinhood said Wednesday that its prediction market offering is generating about $100 million in annualized revenue. The company partners with prediction markets company Kalshi. DraftKings, a betting app, plans to offer its own prediction market platform in the coming months.

"Assuming prediction markets take just 20% market share from sportsbooks, nearly $8 billion of revenue could flow to these emerging platforms by 2030," Piper Sandler analyst Patrick Moley wrote in a Sept. 23 research note.

In an interview with Barron's at the Schwab Impact conference, Wurster elaborated on what worries him about prediction markets and why he felt compelled to list it alongside other trends that are reshaping financial services, such as artificial intelligence and digital assets.

Independent financial advisors aren't in the business of providing clients with an opportunity to wager on whether the Denver Broncos will beat the Las Vegas Raiders, but advisors hold positions of trust with their clients, and the advisors in the room that day have millions of such relationships.

"I think it's incumbent on all of us to help clients and to make clear to prospective investors the difference between gambling and investing," Wurster said. "I think RIAs see through clients' eyes, want to do right by clients, and can make sure that their clients -- and most important clients' kids -- understand the difference."

During both his speech and his interview with Barron's, Wurster said that he isn't against gambling. But "to the extent that there are apps that are blending the two and not drawing a stark contrast, I think that's a disservice."

Some of Schwab's competitors aren't holding back. Robinhood, Webull, and Interactive Brokers offer customers access to prediction markets. Interactive Brokers doesn't offer sports-related event contracts, which are among the most popular. Investors may be wondering whether Schwab will jump on the prediction market bandwagon, but Wurster said he's focused on innovating in other ways for clients, pointing to wealth management and access to alternative assets.

Some advocates for prediction markets say that investors can use event contracts as a hedge in portfolios. Wurster is skeptical. "You can make the case that what the Fed is doing ties into investing, but it is hard to tie sports gambling to investing," Wurster said.

Wurster noted that investors also have other means for hedging positions in a portfolio, such as options. Investors have to receive approval from Schwab to trade options there. The company provides a lot of education to investors before they even begin using option strategies, Wurster said.

"We approach active trading the way we do the rest of our business, which is we want clients to achieve better financial outcomes," he said. "If people are going to actively trade, we want them to have the most research, best education, timely insights from our experts -- and if we can apply all that, we can give them the best probability of success."

Schwab is one of the nation's largest brokerage firms and the largest custodian for RIAs, providing advisors with a trading platform and safeguarding client assets on their behalf. The Westlake, Texas-based company has $11.6 trillion in client assets, split between individual investors and advisors.

Wurster said his concerns about prediction markets came after he saw other brokerage firms begin to offer sports-related event contracts. "If you're a young investor, you've made some money and you got, say, $10,000, it's so easy to move it to bet on sports," he said.

When asked whether regulators should get involved, he is noncommittal. "We'll see whether that changes," he said. Wurster said he isn't only concerned about how placing sports betting alongside investing might change investors, but also how it could change his industry.

"I prefer we don't get into sports gambling," he said. "The reality we face is that if our competitors are making so much money in sports gambling that it gives them an edge to invest in brokerage -- that's something we have to keep an eye on."

Write to Andrew Welsch at andrew.welsch@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

November 10, 2025 14:16 ET (19:16 GMT)

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