Goldman Sachs (GS) is exploring prediction markets and how it can benefit from this fast-growing but lightly regulated market, the firm’s chief executive said on Thursday.
“We have a team of people here that are spending time with them and are looking at it,” CEO David Solomon said during the investment bank’s Q4 earnings call.
In the last two weeks, Solomon has personally met with the two big prediction firms (POLYMARKET) (KALSHI) and their leadership “and spent a couple of hours with each to learn more about” these markets.
Goldman’s (GS) potential entrance into prediction markets would bring the company deeper into competition with the likes of retail trading app Robinhood Markets (HOOD), which saw its stock retreat 7.6% in Thursday midafternoon trading. If Goldman — one of the largest Wall Street banks — moves in, how would Robinhood compete and sustain momentum in that space?
Solomon said that he sees potential where prediction market contracts regulated by the Commodity Futures trading Commission “cross into our business,” while warning that adoption is likely to be slower than some expect.
GS shares climbed 4.3% after its Q4 earnings beat the consensus estimate, although its revenue missed Wall Street expectations due to markdowns related to its pending sale of the Apple credit card portfolio to JPMorgan Chase.