Goldman Sachs Bans Employees From Most Prediction Market Bets

Goldman Sachs just drew a hard line on prediction markets. The bank has banned employees from trading on prediction markets except for sports and entertainment bets, in one of the most pointed efforts by a Wall Street firm grappling with the new regulatory issues raised by the boom in betting on events.

What the policy actually covers

Goldman recently updated its personal trading policy to prohibit trading on event contracts related to specific companies, including Goldman itself, as well as election outcomes or the performance of any financial market, according to a document seen by Bloomberg. The ban also extends to contracts tied to macroeconomic data and geopolitics.

Sports and entertainment bets remain permitted under the policy. Staff who break the rules more than once could face dismissal or have their accounts shut down, and where a trade is deemed improper, the bank reserves the right to claw back any gains exceeding $200 or direct that sum to a charitable organization.

Why now: the insider trading angle

The Goldman directive comes after what was described as the first event contract insider-trading case involving a private sector company, when federal authorities at the CFTC and DOJ brought charges in May against Michele Spagnuolo, a Google employee, alleging he exploited inside knowledge to place winning bets on Polymarket contracts tied to the company’s ‘Year in Search’ rankings. The CFTC’s complaint alleged that Spagnuolo, trading under the username ‘AlphaRaccoon,’ walked away with roughly $1.2 million in winnings.

A Goldman representative offered no comment on the specifics of the policy beyond noting that trading on material, nonpublic information is prohibited across every market the bank operates in.

Do you want to see how to make more plays? Do you want to find gains yourself?

Unusual Whales helps you find market opportunities through our market tide, historical options flow, GEX, and much, much more.

Create a free account here to start conquering the market with Unusual Whales.

How the rest of the Street is responding

JPMorgan Chase issued only a cautionary nudge to its workforce, urging employees to weigh their decisions carefully before trading on financial sector contracts, a stance that falls short of Goldman’s outright ban, according to Barron’s. Morgan Stanley said it has policies in its employee code of conduct, and at Bank of America, internal communications outlining new trading restrictions for employees were being rolled out, a person with knowledge of the situation said.

Hedge funds Point72 Asset Management and Balyasny Asset Management took a more sweeping approach than Goldman, barring all personal-account prediction market activity for their employees outright.

Government is watching too

The White House warned staff against placing bets on prediction markets using nonpublic government information in March, after unusual trading activity in futures markets preceded a public announcement by President Donald Trump about a pause in strikes against Iran.

Of 50 companies surveyed by CNBC, only three revealed they have policies related to trading on prediction markets, while another two said it was something they were actively reviewing. That gap is the story: prediction markets have outrun the compliance playbook. Check more news here.

Options market and stocks to watch

Watch GS for any headline risk as the bank sets the tone for Wall Street policy on event contracts. JPM, MS, and BAC are worth tracking as peers formalize their own restrictions, which could pressure prediction-market volumes tied to financials.

GOOGL is also on the radar given the underlying insider-trading case involving a Google employee that helped trigger this compliance wave.

Want more market intelligence? Create your free Unusual Whales account for options flow, market tide, GEX, and the full toolkit.