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While Wall Street courts prediction markets as a business opportunity, its biggest banks are simultaneously restricting employees from using them.
Four major banks tighten rules as scrutiny grows
Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America have each revised employee conduct policies to address prediction-market trading, according to a source cited by Reuters.
Goldman’s updated code bars employees from event contracts tied to financial markets and political outcomes that could create real or perceived conflicts of interest with the bank, its clients or the broader financial industry. Sports-related contracts remain permitted.
Morgan Stanley, JPMorgan Chase and Bank of America are also tightening their own policies, bringing prediction-market rules in line with existing restrictions on traditional betting, Reuters reported. None of the three banks has disclosed the full scope of its changes. Violations across the banks could bring disciplinary action, including termination.
Wall Street’s prediction market push continues
The restrictions come even as Kalshi and Polymarket push deeper into institutional finance.
Kalshi this month launched 13 contracts letting users bet on the outcomes of clinical drug trials and expanded contracts tracking the cost of artificial intelligence computing power — a tool aimed at hyperscalers, cloud providers and companies with fast-growing token budgets — according to Yahoo Finance. The company also launched its own version of a Bloomberg terminal.
Kalshi is positioning these moves as evidence that prediction markets can mature beyond their roots in sports and political betting into tools that hedge real financial risk.
Possible use cases cited include retailers hedging commodity costs and resorts hedging against poor snow years. The Commodity Futures Trading Commission‘s chairman has made similar arguments in pushing to keep state regulators from overseeing the platforms, according to the report.
At the same time, Kalshi is cracking down on insider trading on its own platform; its most recent enforcement action involved a teleprompter operator for President Donald Trump, Yahoo Finance reported. The company appears to be betting that legitimacy, not just growth, will determine whether institutions embrace it as a genuine financial venue.
The result is a split posture on Wall Street: banks are exploring prediction markets as a business line for clients while writing rules that keep their own employees at arm’s length from the same products.
