Goldman Sachs CEO David Solomon recently said the investment bank is actively examining opportunities in the prediction market space, highlighting growing institutional interest, according to CNBC.
Key Takeaways
- Goldman Sachs' senior leadership has met with platform executives, and internal teams have assessed potential overlaps with traditional derivatives.
- The bank views some prediction market contracts as structurally similar to existing financial instruments, creating possible future business opportunities.
- Despite rising interest, Goldman Sachs cautioned regulatory uncertainty is likely to slow Wall Street's broader entry into the industry.
Speaking during Goldman's fourth-quarter earnings call, Solomon confirmed he had recently met with leaders from the two largest prediction market platforms and tasked internal teams with assessing how the products might intersect with Goldman's existing business lines.
Platforms such as Kalshi and Polymarket have expanded rapidly in the past year, attracting the attention of traders, regulators, and now Wall Street firms. Solomon noted that some contracts overseen by the Commodity Futures Trading Commission increasingly resemble traditional derivatives.
Solomon said the regulatory status of specific prediction markets makes them appear similar to financial instruments Goldman already trades or clears, potentially creating overlap with the bank's core activities. At the same time, he cautioned against expectations of a swift move into the space.
He added that while interest inside the firm is high, broader adoption would likely move more slowly than public commentary suggests.
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Gaming industry pushback on sports-linked contracts intensifies
As institutional curiosity grows, opposition from the gaming sector has sharpened. The American Gaming Association (AGA) and the Indian Gaming Association have jointly urged Congress to intervene against prediction market platforms offering contracts on sports-related events.
In a letter to lawmakers, the groups argued that such products function as unregulated sports betting and threaten state oversight and tribal gaming rights, as the contracts are offered without the consumer protections and tax frameworks that govern regulated sportsbooks.
They pointed to the CFTC's self-certification process, which allows new contracts to launch unless regulators step in, as a loophole enabling rapid expansion.
The lobbying groups called for Congress to clarify the law, potentially through upcoming legislation on the cryptocurrency market structure. Many prediction markets rely on crypto-based settlement systems, and lawmakers are already debating how to supervise those products.
War-related contracts raise legal, ethical concerns
Regulatory scrutiny has intensified further as prediction markets branch into geopolitics and armed conflict. Polymarket, backed by Intercontinental Exchange, recently listed contracts tied to potential military actions involving China, Taiwan, Iran, and Russia's war in Ukraine. One market tied to possible U.S. strikes on Iran drew more than $18 million in trading volume.
A group of senators warned that federal law bars approval of event contracts connected to armed conflict. The AGA argued such products would also be prohibited under state and tribal gaming laws.
Polymarket did not comment publicly but has previously said its markets help users assess risk when traditional information sources lag. Competitors such as Kalshi have so far avoided contracts explicitly referencing military action, instead offering contracts on political or economic outcomes.
