Asked about this and other innovations by an analyst during the company’s earnings call, Solomon said that prediction markets are “super interesting,” that he met with the leaders of two big companies in that space over the last two weeks to learn more, and that people at Goldman Sachs are spending time with those companies.
“When you think about some of these activities, particularly when you look at some of the ones that are CFTC [Commodity Futures Trading Commission] regulated, they look like derivative contract activities, and so I can certainly see opportunities where those cross into our business, and we’re very focused on understanding that, understanding the regulatory structure that’s going to develop around that, seeing where there are opportunities for us to have capabilities or to partner to serve our clients around these,” Solomon said during the call.
Solomon added that these discussions are in their early stages but that the company is spending a lot of time on this topic.
Seeking Alpha, which flagged Solomon’s comments, said in a Thursday report that if Goldman Sachs were to get involved with prediction markets, it would be in deeper competition with companies such as Robinhood Markets.
PYMNTS reported in October that “the prediction market moment is here” and that its momentum is underpinned by several forces.
One of those forces is a market architecture that allows for a far broader range of products, including finance, culture, politics, entertainment, weather and sports, all packaged as yes/no contracts or binary outcomes. Another is the entry of major platforms, which signals scale.
Robinhood Chairman and CEO Vlad Tenev said in November that since launching prediction markets on its platform in 2024, the company had doubled its volume of contracts each quarter. During the third quarter, Robinhood’s number of total event contracts traded reached 2.3 billion, Tenev said.
Coinbase expanded its prediction markets business in December by acquiring The Clearing Company, days after Coinbase said it would begin offering access to prediction markets in the United States.
During the same month, DraftKings entered prediction markets with the launch of DraftKings Predictions, a standalone app and web product that it said would offer event contracts across 38 states.