Cboe CEO on Getting Into Prediction Markets

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Transcript

00:00Let's talk a little bit more about prediction markets, one of those areas where you're looking

00:03to grow organically. We've seen some of your competition, of course, make big moves, big

00:08investments in that space. And I know that it's an area that you identified, especially on the

00:13earnings call, as a potential opportunity for growth for your business. And I wonder

00:17what the potential timeline is there for realizing some of that ambition, given that this space does

00:23seem to be moving quite quickly. Yeah, it is moving quickly. But at the same time, I also think it's

00:31still early stages. You know, our focus right now is on our own organic efforts, which I hope will

00:39come to fruition in the next several months. You know, I want to make sure that, you know, we

00:45develop our own products that we list and clear them on our own exchanges and through our own

00:51clearing houses and clearing house partners. You know, the way I think about partnerships

00:57is our distribution channel partnerships. And we've got, you know, great partnerships with, you

01:03know, a broad array of retail brokers and obviously institutional brokers as well. And so those will

01:10be the focus of our partnerships. And our focus will be different than I think many of the other

01:16people in the marketplace. You know, we want to make sure that we're focused on financial

01:21and economic contracts, ones that are relevant to our core products, relevant to our customer

01:27base. You know, I think in some ways, I would say CBO was actually the innovator in these kinds

01:32of markets. When we developed zero DTE options, you know, we provided much more access to customers

01:40who are interested in shorter term contracts that have, you know, most of them and the way

01:46that they trade capped risk. So I view that as sort of an easy connectivity point as we

01:52focus on event and prediction products based on economic and financial risks. Those customers

01:59will graduate into our options products. Well, Craig, just to follow up on that point, does that

02:04imply that you're not looking at sports games, for example, as you explore this prediction market?

02:09Yeah, it's really not a focus of ours. You know, I'm sure that and I watch all this stuff,

02:16I pay attention to it. I know there's explosive growth there. I know that there's probably the

02:22potential to make money there. It's also fraught with lots of, you know, litigation and regulatory

02:29risks as well. So that's, I think, for other people. But for CBO, we're going to remain focused on

02:36things that have financial and economic implications. And that's where we're going to choose to, you know, play.