Betting

Goldman Bars Staff From Political, Financial Prediction Bets

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Goldman Sachs has told employees they can no longer bet on prediction markets tied to elections, financial markets, or the bank’s own business, treating the fast-growing event-contract platforms as a conflict-of-interest risk rather than a harmless side bet. Sports and entertainment wagers are still allowed.

The New York bank recently updated its personal trading policy to prohibit employees from trading event contracts linked to specific companies, including Goldman itself, along with election outcomes, macroeconomic data, and the performance of any financial market, according to Bloomberg, which first reported the change after reviewing an internal document. Repeat offenders can face discipline up to termination, and the bank can claw back winnings above $200 or send them to charity. A Goldman spokesperson declined to detail the policy but said the firm already bars employees from trading on material, nonpublic information across every market it operates in.

Wall Street draws its own lines

The move makes Goldman one of the first big US firms to write explicit prediction-market rules, and the banks are not landing in the same place. Morgan Stanley has added prediction-market language to its employee code of conduct but has not spelled out what it permits or bans; a spokesperson confirmed the policies to CNBC without providing details. The distinction matters, because Morgan Stanley is reportedly also an investor in Kalshi, having joined the platform’s funding round earlier this year — exactly the kind of overlap between a bank’s business and an event-contract venue that the new conduct rules are meant to police.

Rivals are spread across the spectrum. JPMorgan has urged caution rather than imposing a ban, telling staff to limit bets on contracts tied to the bank. Bank of America is rolling out restrictions covering company-specific, macroeconomic, and financial-services contracts. A CNBC survey found only three of 50 companies it contacted already had formal prediction-market policies, with two more reviewing the issue. Hedge funds have gone further: Point72 and Balyasny barred personal-account prediction-market trading entirely.

The case that put compliance desks on alert

The clampdown follows the first insider-trading case on a prediction market to involve a private-sector employer. In May 2026, the Commodity Futures Trading Commission and federal prosecutors in New York charged Google software engineer Michele Spagnuolo with using confidential internal data on the company’s “Year in Search” rankings to place winning bets on Polymarket, allegedly collecting about $1.2 million under the handle “AlphaRaccoon.” The commodities regulator is seeking to recover the profits, impose penalties, and ban him from trading, while a parallel criminal case moves ahead. It was the second Polymarket insider case in as many months, after an Army soldier was charged in April 2026 with betting on classified knowledge of a US operation to capture Venezuelan President Nicolás Maduro.

For compliance officers, the case reframed event contracts as a live enforcement risk rather than a hypothetical one. Because the platforms list thousands of contracts on companies, interest rates, elections, and economic data, almost any employee with access to sensitive information has a potential edge. Yet the ground rules are barely written: the CFTC has what Washington and Lee law professor Karen Woody called a “blank canvas” for how it will pursue insider trading in this market, she told CNBC.

A product regulators still can’t classify

The banks are tightening up while the legal status of prediction markets remains unresolved. The CFTC claims exclusive federal authority over event contracts, while a growing list of states treats the sports and election markets as unlicensed gambling. That standoff has produced conflicting court rulings and, this week, a New York judge’s refusal to shield Kalshi from state gambling law. The fight is widely expected to reach the Supreme Court.

The uncertainty has not slowed the money. Kalshi is reportedly in talks to raise capital at roughly $40 billion, nearly double its valuation from two months earlier, even as sports contracts still generate most of its revenue and other operators eye new markets abroad. Both leading platforms have moved to police themselves, Kalshi through employment-verification and market-surveillance partnerships and Polymarket through blockchain-analytics deals, in part to reassure the institutions and regulators now circling the sector.

Governments are drawing the same line as the banks. Arizona Governor Katie Hobbs signed an executive order on July 9, 2026, barring state executive-branch employees from using nonpublic government information to profit on prediction markets, echoing a step California took in March 2026. For Wall Street and statehouses alike, the message is converging: a legal, mainstream-looking product can still be a career-ending trade when it brushes against information the bettor is not supposed to use.

Elena Markov is an AI-generated analyst at Gaming.net, tracking regulatory developments, licensing decisions, and enforcement actions in major gambling jurisdictions worldwide. Her reporting centers on specific policy changes, fines, auditor findings, and legal interpretations affecting licensed operators.

Elena’s articles parse regulatory documents and enforcement notices from bodies such as the UK Gambling Commission, Malta Gaming Authority, and state regulators, explaining how these moves influence market access, operator obligations, and compliance costs. She foregrounds named regulators, actual rulings, timelines, and documented outcomes.
Articles authored by Elena Markov are AI-generated and reviewed by Gaming.net’s editorial team to ensure accuracy, clarity, and compliance-aware coverage of gambling regulation.