Esposito said Citadel Securities isn’t interested in sports betting, which makes up a large chunk of the activity on online prediction sites. But as geopolitical events become more important for investors and companies, they’ll need market players like Citadel, which is one of the largest global market-makers for stocks and options contracts, to deepen markets and allow larger bets.

He cited the US mid-term elections in November, when the Democrats hope to wrest control of Congress from Republicans as a first step toward taking on President Donald Trump.

“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. “There’s a good use case” for clean ways to hedge risks, he added.

Citadel Securities already handles trades that individual investors make through brokerages like Charles Schwab and Robinhood. As retail interest grows in predictions, “that would likely pull us in,” he said. “I’m following [Kalshi’s] and other business models quite closely at the moment.”

So is his boss, Peng Zhao, the CEO of Citadel Securities: He invested personally in Kalshi last June.

Citadel is a sponsor of Semafor World Economy. Jim Esposito made his comments in an unsponsored editorial interview.