Goldman Sachs considers entering prediction markets amid regulatory shifts and rapid growth

Goldman Sachs is exploring formal ties to the rapidly expanding prediction‑markets sector, a move that could shift how Wall Street treats platforms long framed as niche or legally ambiguous. David Solomon told The Arabian Post that Goldman has held talks with executives from Polymarket and Kalshi, and described these venues as “sophisticated markets that resemble derivatives trading more than online betting.”

The outreach reflects a strategic recalibration at Goldman as the bank seeks opportunities to deploy trading expertise without taking on balance‑sheet risk. Prediction markets price contracts on the probability of future events , from elections to economic indicators , in ways familiar to traders who work with options and futures. Industry proponents argue these contracts aggregate information efficiently and can serve as forecasting tools for businesses and policymakers; Goldman’s characterisation signals how a major bank might present involvement to regulators and clients.

Polymarket and Kalshi have developed along different regulatory tracks. Polymarket initially operated offshore and built liquidity using blockchain‑based settlement, while Kalshi has pursued a regulated US‑exchange model under Commodity Futures Trading Commission oversight. Goldman’s talks with both firms indicate it is weighing multiple approaches rather than endorsing a single model.

Recent developments have accelerated the sector’s evolution and complicated the regulatory landscape. According to Rothschild & Co., Kalshi raised $1 billion in November 2025 at an $11 billion valuation after a $300 million Series D in October 2025 that valued the company at $5 billion; trading volumes reportedly surpassed $1 billion per week in December 2025, a jump of more than 1,000% year‑on‑year. Such growth helps explain why established financial institutions are reassessing the market’s relevance to hedging and analytics.

At the same time, the legal environment has been turbulent. CBS News reported that in October 2025 the New York State Gaming Commission issued a cease‑and‑desist to Kalshi alleging it offered sports betting without a state licence; Kalshi responded with a lawsuit contending federal CFTC authority pre‑empted state action. Separately, a D.C. District Court ruling in Kalshi’s favour determined that elections are not games of chance and that the CFTC had overstepped in banning certain election‑linked contracts, a judgment that Kavout says paved the way for Polymarket to secure CFTC approval to operate a regulated US exchange in November 2025. Polymarket’s permission comes with constraints: US users cannot access Polymarket directly and must trade through traditional brokers.

Those regulatory shifts matter for any bank contemplating engagement. The CFTC has historically scrutinised event contracts, particularly those tied to elections, citing public‑interest concerns. Kalshi has already faced legal disputes over what contracts it may list, and Polymarket has at times limited access for US users. For a global bank, acceptable forms of participation could therefore range from advisory services and data partnerships to building market‑making technology, rather than direct retail offerings.

Market participants see both upside and risk. Institutional involvement could bring deeper liquidity, more rigorous risk‑management and faster standardisation of contract design and transparency. Industry data and media increasingly cite prediction‑market prices during political cycles and periods of macroeconomic uncertainty. Critics warn, however, that greater bank participation might crowd out grassroots experimentation, concentrate market power, and enable price distortions from large or coordinated traders.

Goldman’s inquiry should not be read as an imminent product launch, industry analysts caution, but it does shift the tone. Historically, big banks have steered clear of prediction markets to limit reputational and compliance exposure. Engagement from a top‑tier institution could confer legitimacy on the argument that these platforms function as information markets, potentially accelerating efforts by operators to court institutional users and to clarify the regulatory framework under which they operate.

How this will reshape competition remains an open question. Smaller fintech firms and academic groups have long pioneered innovative prediction mechanisms, while crypto‑native platforms pushed scale and accessibility. Entry by established banks could bring capital and conventional market discipline, but may also tilt the ecosystem toward the needs of sophisticated traders and institutional counterparties.

For now, the sector sits at an inflection point: rapid commercial growth and favourable court rulings have increased institutional interest, while state and federal regulatory actions continue to define the boundaries of permissible contracts. Goldman’s conversations with Polymarket and Kalshi signal that major incumbents are no longer ignoring the space, but any deeper involvement will depend on how regulators, exchanges and market operators resolve the outstanding legal and structural questions.