Goldman Sachs restricts employee prediction market betting amid compliance risks

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Goldman Sachs limits prediction betting

Highlights

Goldman Sachs directs employees to confine prediction market bets to sports and entertainment, warning multiple breaches may result in termination.
Prediction platforms like Kalshi, reportedly in funding talks at a $40bn valuation, increasingly offer bets on market-sensitive events such as elections and benchmarks.
Authorities scrutinize prediction markets after large, well-timed trades on geopolitical events generated hundreds of thousands of dollars from select accounts ahead of market-moving news.

Employee policy targets market-sensitive wagers

As first reported by Financial Times, citing Bloomberg, Goldman informed employees in an internal memo that they should limit betting on prediction markets to sports and entertainment categories, according to a person familiar with the matter. The bank also warns that multiple breaches of the policy could cost an employee their job, while Goldman declines to comment.

Financial institutions such as Goldman operate under strict rules on what transactions employees may make because of their proximity to material non-public information that can move markets. That makes prediction platforms such as Kalshi and Polymarket a growing compliance challenge as they offer wagers tied to elections, interest rates and other market-relevant outcomes.

Growth of platforms draws scrutiny across finance

Prediction market operators are growing quickly as consumers use them to bet on world events and on financial benchmarks such as where the S&P 500 will stand at a given time. Kalshi is in talks to raise funds at a valuation of about $40bn, the Financial Times previously reports.

The platforms are also drawing scrutiny over the risk that traders could profit from advance knowledge of upcoming events. In the past year, organisers behind the Nobel Peace Prize investigate a potential leak after a burst of successful bets on the Venezuelan political leader who eventually wins the award, and a U.S. special forces soldier with prior knowledge of an operation to capture Venezuela leader Nicolás Maduro allegedly places bets on that event on Polymarket.

The Financial Times also previously identifies unusually large, well-timed bets that generate hundreds of thousands of dollars in profit from 12 suspicious accounts in the days before the initial U.S. attack on Iran earlier this year. While these companies still make most of their revenue from sports betting, they are seeking broader links with financial services groups, including Kalshi's buildout of block-trading operations.

In our earlier article on Kalshi’s interest-rate markets, we covered how a divided Federal Reserve was amplifying uncertainty over the path of U.S. rates through 2026. We noted that Kalshi traders were pricing in meaningful odds of additional rate hikes and a low likelihood of cuts, highlighting how prediction markets increasingly track—and potentially influence—market expectations around monetary policy.

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