Wall Street Banks Restrict Employee Trading on Prediction Markets

Major Wall Street banks are tightening rules around employee trading on prediction market platforms amid growing concerns that staff could use nonpublic information to profit from event contracts. Goldman Sachs has reportedly banned employees from trading contracts tied specifically to the bank, including those related to financial markets, macroeconomic events, elections and geopolitical developments, according to a CNBC report citing people familiar with the matter.

Broader Regulatory Attention Grows

The banking sector’s response comes as prediction markets face increasing scrutiny from lawmakers and regulators. Earlier this year, federal authorities charged a Google software engineer with using nonpublic workplace information to earn over a million dollars trading on Polymarket. Separately, a soldier was previously accused of profiting significantly by betting on political developments involving Venezuela. In response to these cases, a lawmaker introduced legislation aimed at restricting certain public officials from wagering on policy and political outcomes.

Polymarket Pushes for Expanded US Access

Amid the scrutiny, Polymarket is seeking regulatory approval to offer margin trading to US users, which would let traders take positions with less upfront capital. The platform filed an application with the National Futures Association through an affiliate entity, marking its latest step toward expanding its presence in the US market. Its main competitor already received similar approval earlier this year.

Prediction markets have seen surging activity recently, with Polymarket reaching a record $713 million in daily trading volume in June, partly driven by interest around the World Cup. Its rival platform also posted a record monthly trading volume of nearly $9.4 billion during the same period.