Goldman Sachs has told its employees to stay away from prediction markets, unless the bet in question involves a football match or a reality show finale. The Wall Street bank recently updated its personal trading policy to prohibit employees from trading event contracts tied to specific companies, election outcomes, or the performance of any financial market. That covers Goldman’s own stock, ceasefire dates in ongoing conflicts, the price of Bitcoin, and even whether a merger clears regulatory approval. The rules come with teeth. Repeated violations can lead to termination or the closure of a staff member’s trading account. If a banned trade goes through and turns a profit above $200, Goldman can make the employee forfeit the money or donate it to charity. Betting on whether a team wins a championship, though, is still fine. Goldman declined to comment on the policy, which was first reported by Bloomberg.
Why prediction markets are giving compliance teams a headache
Kalshi and Polymarket have exploded over the past year, letting anyone wager on everything from elections to corporate earnings to where the S&P 500 lands on a given day. Kalshi is reportedly in talks to raise money at a valuation of roughly $40 billion. But the same platforms have been repeatedly jolted by people who seemed to know something before everyone else did.A US special forces soldier with advance knowledge of the operation to capture Nicolás Maduro allegedly placed bets on it on Polymarket. Nobel Peace Prize organisers looked into a possible leak after a rush of successful bets landed on the eventual Venezuelan winner. The Financial Times separately flagged 12 suspicious accounts that made unusually well-timed, high-value bets days before the initial US strike on Iran this year. For a bank whose employees routinely handle material non-public information, that is an obvious problem.
Goldman is stricter than its rivals, but not the strictest on the Street
JPMorgan Chase took a softer line, telling staff to “think carefully” before participating in markets linked to the financial sector. Morgan Stanley says it has rules but won’t detail them. Bank of America restricts company-specific, macroeconomic and financial services contracts, and confirmed it recently updated its guidance with clearer examples.Hedge funds have gone further. Point72 and Balyasny have imposed blanket bans on personal prediction market accounts.The irony is that Wall Street still wants the business. CEO David Solomon called the platforms “super interesting” in January and said he had met leaders of both major firms. Susquehanna and Jump Trading are already making markets on the exchanges.
