Wall Street has always preferred to sell the shovels rather than dig for gold. The house keeps its cut whether the player wins or loses, and the oldest edge in finance is owning the table instead of sitting at it.
That instinct built the trading desks, the exchanges, and the fee machines that keep the biggest banks rich in good markets and bad ones alike.
So when a fast-growing new corner of the market started minting overnight winners, the usual script wrote itself. The banks would study it, bless it, and eventually package it for clients the way they once did with options, futures, and crypto. Some of the biggest names on Wall Street have said out loud that they want in.
One of the loudest players in that chorus just did something far stranger than buy in. Before it sells a single one of these bets to a single client, Goldman Sachs (GS) has told its own people they are no longer allowed to make them.
In a quiet update to its personal trading policy, the bank barred employees from wagering on prediction market contracts tied to companies, elections, financial markets, and the economy, according to Bloomberg. Sports and entertainment bets are still fine.
How a niche betting market became Wall Street’s newest obsession
Prediction markets let people bet real money on real events, from whether the Federal Reserve cuts rates in December to whether a sitting president finishes the year in office. Each contract pays out based on the outcome. That turns a guess about the future into something you can trade like a stock.
I have been tracking this shift since these platforms went mainstream, including JPMorgan’s own warning to staff about them earlier this year. What started as a crypto curiosity is now a line item in Wall Street strategy meetings.
Two years ago, almost no one outside the crypto world had heard of Polymarket. Today it and its regulated rival Kalshi clear billions of dollars in bets every week, and traditional finance has noticed.
The scale of the run is easy to miss until you line up the numbers:
Sector trading volume jumped from about $16 billion in 2024 to nearly $64 billion in 2025, with Bernstein projecting roughly $240 billion this year, according to CNBC.
Kalshi raised $1 billion at a $22 billion valuation, and its weekly volume neared $3 billion, up from about $100 million a year earlier, according to Decrypt.
Polymarket drew a roughly $2 billion investment from Intercontinental Exchange (ICE), the parent of the New York Stock Exchange, according to ICE.
That growth pulled in the problem money always attracts. If you already know how an event ends, betting on it is not a prediction. It is a payday.
In a March 12 advisory, the Commodity Futures Trading Commission (CFTC) put these platforms on notice that it can police insider trading on them just as it does in any other market.
Weeks later, prosecutors charged a Google (GOOGL) employee who allegedly turned nonpublic company data into roughly $1.2 million on contracts tied to Google’s own search rankings, according to CNBC.
Goldman Sachs quietly bars employees from prediction market bets on finance, elections, and the economy.d3sign / Getty Images
What Goldman’s prediction-market ban tells you about who has the edge
Goldman’s new policy does not nibble at the edges. It bars employees from event contracts tied to Goldman itself, to elections, to financial markets, to macroeconomic data, and to geopolitics, according to Bloomberg.
Break the rule more than once, and you can be fired, and the bank can claw back any gains over $200 or send them to charity.
Here is where it gets awkward. JPMorgan Chase (JPM) told its own staff only to be “cautious” with these contracts, stopping well short of a ban, Barron’s noted.
And its chief executive, Jamie Dimon, has said it is “possible one day” the bank offers something like Kalshi or Polymarket to clients, though it would steer clear of sports and politics, he told CBS in April, CoinDesk reported.
Goldman is not innocent of the same ambition. CEO David Solomon called prediction markets “super interesting” in January and met the founders of the two biggest platforms, according to CNBC. In six months, the bank went from courting the product to fencing off its own staff.
My read, after two years of watching this space, is that the memo is the tell. When the most informed traders in the building are ordered off a market while the sales side studies how to sell it, you learn who holds the edge and who is meant to supply it.
On a prediction market, someone is always on the other side of your bet, and Goldman just conceded that someone might know more than you do.
Where Wall Street’s prediction-market crackdown goes next
Goldman is not alone, and it will not be the last. Morgan Stanley (MS) and Bank of America (BAC) have folded prediction-market limits into their employee conduct rules. Hedge funds Point72 and Balyasny went further and banned the trades outright, Bloomberg confirmed.
Washington is moving, too. The CFTC proposed new rules on June 10 for which event contracts can exist at all, and lawmakers have floated bills to bar federal officials from betting on their own decisions.
For a retail trader, none of this is a reason to cheer a crackdown or dread one. It is a signal.
The people with the clearest view of these markets are being walked to the exits, and the same firms doing the walking may soon hand you a ticket to get in.
Before you take the other side of a banker’s forbidden bet, it is worth asking what they know that you do not.
