Cboe Global Markets launched its prediction markets suite on June 23 with binary options contracts on the Mini-S&P 500 Index, listed as XSPBW and XSPBX. The contracts were launched at Interactive Brokers on Tuesday and will be rolled out to Charles Schwab in the coming months.
XSP contracts work like Kalshi and Polymarket event contracts economically. The Yes position pays $100 if the index settles at or above a specified level and $0 otherwise.
The contracts are cleared through an options clearing and trading company under options rules overseen by the Securities and Exchange Commission. There is no question of registration with the CFTC and no exposure to state gambling law of the kind Kalshi faces in Kentucky.
Schwab CEO Rick Wurster told the Wall Street Journal in December 2025 that prediction markets were “not at the top of our list right now,” viewing sports event contracts as a blurring of the line between gambling and investing.
Schwab now plans to offer XSP binary options through its 47.2 million accounts and $11.8 trillion in assets. The product is a functional market forecaster. Legal exposure is not.
Nasdaq paved this path two months ago
Cboe follows Nasdaq in the prediction market category regulated by the Securities and Exchange Commission. The Securities and Exchange Commission approved Nasdaq proposal On April 30 to include binary options in the Nasdaq 100 and Nasdaq 100 Micro, following the Nasdaq’s introduction in early March. InterContinental Exchange, the parent company of the New York Stock Exchange, took a parallel approach by investing in Polymarket directly.
ICE committed up to $2 billion in October 2025 at a pre-investment valuation of $8 billion and completed an additional $600 million cash investment on March 27, becoming a global distributor of Polymarket’s event-based data to institutional clients.
Each of Wall Street’s three largest stock exchange operators has now chosen a path into prediction markets. Kalshi handled $16.81 billion in trading volume in May versus Polymarket’s $7.08 billion, per The Block, and its expected market trading volume has increased 393x over the past two years.
The AGA wants Congress to shut down the federal pathway entirely
The gaming industry is moving to close the regulatory gap that makes both paths possible. American Gaming Association President Bill Miller called the framework proposed by the CFTC on June 10 “a remarkable attempt to redefine what constitutes sports betting” and on June 22 sent Congress a letter urging passage of the sports betting law. Prediction markets are the law of gamblingCurtis Schiff’s bill that would prevent the Commodity Futures Trading Commission (CFTC) from allowing contracts for sporting events.
The AGA estimates that states and tribes have lost more than $1 billion in tax revenue to prediction markets. Bipartisan congressional action against the CFTC’s path will not impact Cboe’s forecasts, which are entirely under the SEC’s jurisdiction.
As Cryptopolitan reported on Monday, Cboe Bank is also weighing its weight Bitcoin and Ether transfer Continuous futures contracts were changed to perpetual style contracts, reflecting the CFTC’s May 29 approval of Kalshi and Coinbase. The exchange is systematically moving towards native cryptocurrency platforms for the product categories it created first, using its SEC and CFTC registered infrastructure as a differentiator.
The path that continues after regulatory consolidation will determine what the US forecasting market will look like in 2028.
