Cboe to launch prediction markets tied to economic indicators

Cboe Global Markets plans to launch its own prediction markets platform within the next few months, CEO Craig Donohue told Bloomberg in an interview, becoming the latest major U.S. exchange operator to move into the fast-growing event contracts sector. However, unlike some of its competitors, it will steer clear of sports-related products.

The Chicago-based exchange group intends to offer yes/no event contracts tied to economic indicators and financial-market outcomes, a direction Donohue said fits naturally with Cboe’s long-standing strengths in derivatives and retail-focused trading.

“Our focus right now is on our own organic efforts, which I hope will come to fruition in the next several months,” Donohue said in an interview with Bloomberg. He added that prediction markets “align well with our core capabilities” and can attract a new audience that may transition to other Cboe instruments, including short-duration options.

Cboe joins rivals CME Group and Intercontinental Exchange in pushing deeper into prediction markets, a sector experiencing rapid growth as federally regulated event contracts increasingly mirror traditional gambling products. ICE last month invested $2 billion in Polymarket, valuing the prediction platform at up to $10 billion, while CME has partnered with FanDuel to power a consumer-facing sports contracts app.

Cboe, however, will avoid sports markets entirely, citing intense regulatory scrutiny and ongoing litigation over whether sports-derived event contracts violate state gambling laws. “I know there’s probably the potential to make money there,” Donohue said. “It’s also fraught with lots of litigation and lots of regulatory risk, so that’s for other people. For Cboe, we’re going to remain focused on things that have financial and economic implications.”

Sports-focused competitors such as Kalshi and Novig, and upcoming entrants FanDuel and DraftKings, are expected to crowd the field, while Polymarket is in the process of reopening to U.S. users following earlier regulatory challenges.

Cboe’s expansion comes amid strong momentum in its core business. October options activity across its four U.S. exchanges hit a record 21.4 million average daily contracts, driven by index options and demand for zero-days-to-expiry (0DTE) products. Cboe shares have risen more than 30% this year, outpacing rivals CME and ICE.

Prediction markets remain in their early stages but represent a natural extension for the company, Donohue said. “There’s a lot of interest in expressing viewpoints on the movement of indexes, the movement of equity markets, individual equity options and securities,” he noted.

Donohue, who became CEO in May, said the company sees its best growth opportunities in organic initiatives rather than mergers and acquisitions, building on Cboe’s decades-long evolution from options pioneer to global multi-asset exchange operator.