Summary
- Morgan Stanley has become a strategic partner for the NEXTPredict summit in New York, where it will host a panel focused on institutional capital.
- The firm’s analyst will discuss trends in U.S. gaming, lodging, and leisure, including sportsbooks.
- According to the summit’s co-founder, approximately 90% of prediction market trading is in sports, and current valuations reflect this reality.
There has been a clear interest from institutional players in prediction markets recently. In April, JPMorgan's Jamie Dimon indicated the bank was considering entering the space, although he characterized much of the activity as more akin to gambling than investing, dismissing both sports and political markets. Additionally, Goldman Sachs CEO David Solomon mentioned during a January earnings call that he had discussions with major operators in the sector, yet tangible advancements have been sparse.
Morgan Stanley is stepping up to fill this gap by taking an active role at the NEXTPredict summit on October 22 and 23 as a strategic partner, leading a panel on institutional capital on the second day. Pierre Lindh, co-founder and managing director of NEXT.io, noted that this marks the first time a bank has engaged in a public initiative in this area.
Day 2 agenda: Attend the Morgan Stanley Institutional & Capital panel.
The panel will address opportunities, challenges, and key questions surrounding institutional engagement with prediction markets.
View the complete agenda → https://t.co/jDOHCP8LmR pic.twitter.com/3K0j13DRyM
— NEXTpredict (@nextpredictio) September 16, 2026
This session will explore what could attract institutional investment in prediction markets, as well as the current market structure, risks, and participation hurdles. The panel will be led by Stephen Grambling, who heads U.S. gaming, lodging, and leisure research at Morgan Stanley.
Grambling commented, "Prediction markets are gaining more traction within the financial landscape, but institutional involvement hinges on a comprehensive understanding of the opportunities, market dynamics, and associated risks."
The urgency of this matter is highlighted by recent valuations in the sector, with Kalshi reportedly seeking a $40 billion valuation and Polymarket closing a funding round at $20 billion. In comparison, DraftKings, the closest publicly traded entity, has a valuation of approximately $13 billion.
Lindh remarked to Decrypt that the narrative currently presented by the prediction market industry suggests that its future will differ significantly from its present state. He noted that 90% of the liquidity and trading volume is currently concentrated in sports contracts, with many users viewing these platforms as alternative sportsbooks. “For these valuations to remain viable, there needs to be more diversity in the offerings,” he asserted, as investors are betting on prediction markets evolving into tools suitable for institutional use, allowing banks to hedge risks that cannot be addressed through traditional means.
He illustrated this with an example of a business facing uncontrollable events. A New York conference organizer might execute everything perfectly yet still lose significant revenue due to a hurricane, a risk inadequately covered by conventional instruments. Lindh stated that NEXT.io is applying similar logic internally, utilizing market predictions among staff to gauge whether the company will meet its commercial targets.
Different banking sectors have varying interests in prediction markets. Research teams are investigating whether market odds provide a more accurate reflection of reality compared to polling data, while others are considering internal forecasting or the potential for clients to use contracts to mitigate business risk.
However, Lindh noted that banks are awaiting clearer regulatory guidelines, as many are holding off until ongoing state-level litigation is resolved.
Grambling's involvement at NEXTPredict is particularly noteworthy, given his focus on gaming, which is a classification the industry seeks to move away from. Lindh pointed out that this reflects a history of collaboration rather than strict categorization, mentioning that NEXT.io has partnered with Morgan Stanley for five years, including a joint sports betting show in March, and that Grambling has been a strong advocate for the summit within the bank.
Morgan Stanley has prior experience in the sector, having participated in Kalshi's $1 billion Series F funding round in May, which valued the exchange at $22 billion. Additionally, its wealth management division analyzed prediction markets in an April report, suggesting that the sector’s growth has outpaced the existing regulatory framework. In August, Counterpoint Global released a study assessing forecasting accuracy based on over 72 million Kalshi trades, revealing that contract prices closely aligned with actual outcomes while traders tended to undervalue favorites and overvalue long shots.
Grambling is among 15 recently added speakers, bringing the confirmed lineup for NEXTPredict to 91 speakers across five stages, with an estimated 2,500 attendees expected to participate.
Brought to you by NEXTPredict
Learn More about partnering with Decrypt.