Why would someone who spent nearly three decades at Goldman Sachs leave to join a company best known for letting people trade on election results? That question sits at the centre of the current conversation about prediction market industry growth, and the answer is less about novelty than about plumbing. Prediction market operators have built consumer demand faster than they have built the institutional machinery underneath it, and they are now buying that machinery in the form of people.
Polymarket’s hire of Lisa Mantil, a former Goldman Sachs partner, as head of institutional growth is the clearest example so far. Mantil became a partner at the bank in 2018 and most recently ran its ETF Accelerator, the platform that helps asset managers get new exchange-traded funds to market. Her new remit is not retail acquisition. It is banks, corporates, fund managers and trading firms.
The problem: retail volume alone is a fragile foundation
Start with what the hire is fixing, because that reveals more than the CV does.
Most volume on yes/no exchanges today comes from sports event contracts and a retail user base. That is a commercially attractive position and also a precarious one. The legal status of sports event contracts in the United States remains unsettled, and some legal analysts expect the dispute to reach the Supreme Court. Research desks, including Jefferies, have flagged a window between November and June in which the court could take up a prediction markets case. A ruling that restricts sports derivatives would remove a large share of current volume more or less overnight.
Meanwhile, valuations have climbed sharply. Donald Trump Jr.’s firm has put a further $300 million into Polymarket, and Coinbase and CMCC backed the prediction market liquidity provider Raven at a $90 million valuation. Investors writing cheques at those levels are not paying for a sports betting substitute. They are paying for the possibility that these platforms become financial infrastructure, and that expectation comes with a demand: broaden the use cases and reduce dependence on small retail accounts.
So the problem is twofold. Concentration risk in one contested product line, and a shareholder base that expects a professional market. Institutional clients solve both, but institutional clients will not arrive on their own.
Polymarket institutional: why the skills gap is the real bottleneck
Here is the part people outside finance tend to underrate. A hedge fund does not avoid a new venue because it hasn’t heard of it. It avoids the venue because nobody has answered its questions about counterparty risk, settlement, position limits, reporting, tax treatment and whether the instrument actually hedges what it claims to hedge.
Polymarket’s own framing of the opportunity is telling: institutions have historically relied on proxies and correlated assets, with no guarantee those instruments move in line with the risk they are meant to offset. A contract that pays out directly on the event itself, if it clears the compliance hurdle, is a cleaner hedge than a rough proxy. Getting a trading desk from “interesting” to “approved” is a specialist job, and the people who have done it before mostly work in traditional finance.
The concrete skills being imported into market based betting platforms include:
- Derivatives structuring. Designing contracts with defined settlement sources, clear resolution criteria and terms a risk committee will sign off on.
- Risk management. Margining, exposure limits, stress testing and understanding how correlated positions behave when several markets move together.
- Compliance infrastructure. Surveillance for manipulation, know-your-customer onboarding at institutional scale, audit trails and reporting that regulators recognise.
- Distribution. Knowing which desks buy what, and how a product gets through procurement at a bank rather than through an app store.
- Product packaging. The ETF Accelerator background matters here. Wrapping exposure into a familiar vehicle is how niche asset classes reach mainstream capital, and a prediction market ETF has already been launched by Tema ETFs.
Polymarket has been building this side out in parallel. It runs a dedicated institutional platform, launched Polymarket Institutional Research as a publication on how its markets intersect with the global financial system, and executed its first institutional block trade, a six-figure transaction between two parties in GPU compute. That last one is worth pausing on. A block trade in AI compute capacity has nothing to do with sports and everything to do with corporate hedging.
Prediction markets vs traditional betting operators
The two models look similar from the outside because both let you stake money on an uncertain outcome. Structurally, they are different businesses.
| Dimension | Prediction market exchange | Licensed sportsbook |
|---|---|---|
| Counterparty | Another user; the venue matches orders | The operator itself |
| Primary revenue | Trading and settlement fees on volume | Margin built into the odds, plus hold on losing bets |
| Price formation | Order book; prices set by participants | Odds compiler and risk desk set prices |
| US oversight | Federal commodities and event contract framework | State-by-state licensing regime |
| Product range | Elections, macro data, commodities, sports, corporate events | Sports and, where licensed, casino |
| Core customer | Retail today, institutional being courted | Retail, with VIP segmentation |
Regulatory differences
A sportsbook in the US operates under state gaming licences, with separate approvals, tax rates and advertising rules in every jurisdiction it enters. A prediction market exchange operating as a federally regulated event contract venue answers to a commodities regulatory framework instead. One national approval versus fifty state ones is a meaningful structural advantage, and it is exactly why the boundary between the two is being litigated. Prediction market regulation is not a settled area, and operators are making long-term hiring decisions inside that uncertainty rather than waiting it out. Anyone following how betting regulation is evolving will recognise the pattern: the product arrives first, the rules follow.
Revenue models
A bookmaker’s economics depend on a margin, or overround, embedded in its prices. If a two-way market is priced at 1.90 on both sides, the implied probabilities add to more than 100% and the difference is the operator’s expected take. The house holds the risk and profits over time because of that edge. An exchange has no directional position in the outcome. It earns fees whether the contract settles yes or no, which makes revenue a function of volume and liquidity rather than of customer losses. That sounds cleaner, and in one sense it is, but it also means an exchange needs far more turnover to generate comparable revenue. Traders still pay a cost: fees, plus the spread between bid and offer.
Market liquidity approaches
This is where the two diverge most. A sportsbook can quote any market it wants instantly, because it is the counterparty. An exchange can only quote what someone is willing to trade. Thin books mean wide spreads, bad fills and frustrated users, which is why dedicated liquidity providers such as Raven now attract institutional funding of their own. Professional market makers narrow spreads, and narrow spreads are what make a venue usable for anyone trading size. Institutional talent is being hired partly to court the firms that supply that liquidity. If you want to understand the mechanics, our explainer on market making in betting markets covers how order books and liquidity provision actually work.
What institutional investment signals about market maturation
Senior hires from a major investment bank are a decent maturity indicator because they are expensive and slow to pay off. Nobody recruits a former Goldman partner to run a growth experiment for two quarters. It implies a multi-year plan to sell into regulated financial institutions, which in turn implies confidence that the regulatory framework will permit it.
Three signals are worth separating from the hype:
- Product diversification is defensive, not opportunistic. Building corporate and macro hedging markets gives operators somewhere to stand if sports derivatives are curtailed by the courts.
- Institutional capital demands institutional controls. Surveillance, resolution governance and settlement reliability are prerequisites, not nice-to-haves, and they cost real money to build.
- The category is being reframed. Positioning a venue alongside financial derivatives rather than alternative betting changes who regulates it, who invests in it and who is allowed to use it. That reframing is the whole strategy.
None of this guarantees the outcome. Prediction market industry growth so far has been driven by a contested product in an unresolved legal environment, and a restrictive court ruling would be a genuine setback. Institutional hiring is a bet on a favourable resolution, made with real capital, by people who price probability for a living. That is informative, not decisive.
What it changes for sportsbooks and the wider iGaming industry
Traditional operators face a competitor with a different cost base, a different regulatory route and a narrative that appeals to institutional investors. Several consequences are already visible.
Product pressure comes first. Exchange pricing is transparent, and bettors who compare a sportsbook’s implied probabilities against an exchange’s mid-price can see the margin. That comparison is easier to make than it used to be, and it puts pressure on pricing in the most liquid markets.
Talent competition follows. Quant traders, risk analysts and compliance specialists now have two industries bidding for them, and prediction market platforms can offer a finance-adjacent story that some candidates prefer.
Then there is structural response. Established operators can lobby for parity, acquire or partner with exchange venues, or build exchange-style products themselves. Expect movement on all three fronts. Institutional investment in iGaming has typically arrived through listed operators and private equity; prediction markets are pulling in a different flavour of capital, closer to trading firms and crypto-native funds.
The honest summary for operators and investors is that the ceiling on prediction markets is now being set by regulators and courts rather than by product capability. The people being hired are there to be ready if that ceiling lifts.
Common questions
Why are prediction markets hiring Wall Street talent?
To sell to institutions, they need people who speak that language. Banks, funds and trading firms require documented risk controls, compliance processes, clear contract settlement and familiar product wrappers before they will trade anywhere new. Hiring senior finance operators shortens that process and reduces reliance on retail sports volume, which faces legal uncertainty in the US.
How do prediction markets compare to traditional betting?
Prediction markets match users against each other and earn fees on volume; sportsbooks take the other side of your bet and earn a margin built into the odds. Exchange prices are set by participants, book odds by a risk desk. In the US, exchanges operate under a federal event contract framework while sportsbooks hold state gaming licences. Both involve costs to the participant, whether through fees and spreads or through the bookmaker’s margin.
What does institutional investment mean for prediction markets?
It means higher expectations. Large funding rounds and senior hires point to operators being pushed towards professional use cases, broader contract types and financial-grade infrastructure. It also raises the stakes on regulation, because institutional clients will not trade in a venue whose legal basis is unresolved.
One practical note: event contracts carry real risk of loss, and a professional-looking interface does not change that. Whether you are trading on an exchange or betting with an operator, treat the money as money you can afford to lose, use deposit and loss limits where they are offered, and step away if it stops being a considered decision. Support is available through national problem gambling helplines if it ever feels compulsive.
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