Wall Street Splits on Prediction Markets

Wall Street interest in prediction markets is no longer moving in one direction. Some firms are building around the sector, while others are blocking employee access altogether as compliance concerns grow.

Good to Know

• Point72 Asset Management and Balyasny Asset Management banned employee trading in prediction markets.
• JPMorgan Chase is allowing it under normal personal trading rules.
• Susquehanna International Group and DRW are taking a more active approach.

Wall Street Takes Opposite Positions on Prediction Markets

While some firms were recently exploring dedicated desks and hiring people with Kalshi and Polymarket experience, Point72 Asset Management and Balyasny Asset Management have now imposed blanket bans on employee trading, Bloomberg reported.

That shows how quickly sentiment has changed. Compliance teams are worried about regulatory uncertainty, insider trading risk, and legal fights around the sector.

A major issue is recordkeeping. In the United States, prediction markets fall under Commodity Futures Trading Commission rules as derivatives. Yet platforms such as Kalshi and Polymarket do not generally provide the kind of electronic records firms need for compliance tracking and reporting.

Not every firm is taking the same path. JPMorgan Chase told employees they can participate if they follow the same personal trading rules used for other markets.

Others are leaning in. Susquehanna International Group already has about 60 prediction market traders across Pennsylvania and Dublin. The firm also became the first official market maker on Kalshi and holds a stake in the platform.

DRW has also posted a role for a dedicated prediction market trader, with plans tied to Polymarket, Kalshi, market-making, arbitrage, and event-driven strategies.

The Investment Adviser Association, which represents more than 600 firms managing about $35 trillion, has reported a sharp rise in member questions about compliance in prediction markets.