Major US banks have warned employees that they could face termination if they engage in prediction market trades related to finance and politics, according to unnamed insiders cited by news agencies. The report, initially published by Reuters and corroborated by Bloomberg, identifies Goldman Sachs, Morgan Stanley, JPMorgan Chase, and Bank of America as institutions that have communicated this policy to their staff. The move reflects growing scrutiny of prediction markets, which allow users to bet on outcomes of events such as elections or economic indicators, and raises questions about the intersection of gambling, finance, and corporate compliance.
Prediction markets, often operated by platforms like Kalshi and Polymarket, have gained popularity as venues for trading on the likelihood of future events. While some view them as tools for forecasting and hedging, regulators have increasingly treated them as gambling or unregistered securities. The US Commodity Futures Trading Commission (CFTC) has taken enforcement actions against several platforms, arguing that certain contracts constitute illegal gaming. The banks’ internal policies appear to align with this regulatory stance, aiming to prevent conflicts of interest, insider trading, or reputational damage that could arise from employees speculating on political or financial outcomes.
The specific details of the banks’ warnings remain unclear, but the reports suggest that the policies are broad and apply to trades made through personal accounts. Employees in sensitive roles, such as those with access to non-public information, are particularly at risk. The banks likely view prediction market activity as incompatible with their codes of conduct, which typically prohibit gambling or speculative trading that could undermine client trust. This is not the first time financial institutions have restricted employee trading; many already limit stock and options trading to avoid conflicts. However, the explicit targeting of prediction markets signals a new area of concern.
The development comes amid a broader crackdown on prediction markets in the United States. The CFTC has proposed rules to ban certain event contracts, including those related to political contests, arguing they are contrary to the public interest. Meanwhile, platforms like Kalshi have sued the CFTC to allow election betting, with the case pending in court. The banks’ actions may reflect a desire to preempt regulatory action or to distance themselves from activities that could be perceived as gambling. For the iGaming industry, this trend highlights the blurred lines between traditional betting, financial speculation, and emerging market types.
Industry observers note that prediction markets occupy a gray area in US law. While some states have legalized sports betting and casino gambling, event-based wagering on non-sports outcomes remains largely prohibited. The banks’ policies could further stigmatize these platforms, potentially limiting their growth and user base. However, the impact on the broader gambling sector may be limited, as prediction markets are distinct from conventional casino games or sportsbooks. The news also underscores the importance of compliance for financial institutions operating in a heavily regulated environment.
Looking ahead, the situation may evolve as regulators clarify the legal status of prediction markets. If the CFTC’s proposed ban takes effect, banks may have less reason to enforce such policies. Conversely, if courts allow election betting to proceed, financial firms may need to update their rules. For now, employees at major US banks face a clear choice: avoid prediction market trades or risk their jobs. The story serves as a reminder that the gambling industry’s expansion into new verticals often collides with existing legal and corporate frameworks.