In brief
- Hollywood studios and production companies are warning employees not to bet on prediction markets using insider knowledge, The Hollywood Reporter reported.
- The rules bar bets on casting, release dates and earnings, and at least one company has set up an anonymous hotline to report colleagues.
- A Columbia law professor said bets on blockchain-based platforms can be "basically impossible" to trace if insiders hide their identities well.
Hollywood studios and production companies have been quietly issuing guidelines barring employees from betting on prediction markets, entertainment industry trade paper The Hollywood Reporter reported on Thursday.
The warnings prohibit staff from betting on events such as studio earnings, casting decisions and release dates, or passing information to friends and family so they can bet instead, according to the report. At least one company has reportedly set up a hotline for employees to anonymously report colleagues suspected of placing bets.
The Hollywood Reporter's own parent company, Penske Media, has also updated its employee handbook in recent weeks to ban bets on "award nominations, casting decisions, production timelines and release dates," the outlet said.
The rules extend long-standing bans on insider trading in the stock market to platforms such as Kalshi and Polymarket, which let users bet on everything from who will be cast as the next James Bond to who will be voted off a reality show.
"You now have, essentially, an explosion in the number of employers who have to think about insider trading rules from an ethical standpoint," Joshua Mitts, a law professor at Columbia University who studies prediction markets, told the outlet.
Enforcing those rules may be another matter. "With blockchain-based trading, it can be basically impossible if you know how to use a mixer correctly and know how to hide your identity behind multiple layers of intermediation," Mitts said.
Some bookmakers are already spooked. Betting site BetOnline temporarily pulled its market on the next James Bond this week after a sudden wave of "sharp money" pushed actor Callum Turner above longtime favorite Jack Lowden, raising concerns about a leak, according to the report.
Insider trading on prediction markets
Entertainment insiders have been caught before. In February, Kalshi said a video editor at MrBeast's company had made about $5,000 using confidential information to bet on MrBeast content; he was fired and fined $20,000.
Federal prosecutors have also brought cases over insider trading on prediction markets. In April, an active-duty U.S. soldier was charged with using classified information about the raid to capture Nicolás Maduro to bet on Polymarket. In May, a Google engineer was charged with commodities fraud, wire fraud and money laundering over Polymarket bets allegedly placed using confidential company data. Both cases are pending.
Governments have moved too. California, New York and Illinois have banned state employees from using nonpublic information to bet on prediction markets, while the platforms have rolled out their own surveillance tools. Polymarket has investigated dozens of bets on the U.S. midterm elections.
One kind of entertainment bet is already off the table. Under the Onion Futures Act of 1958, U.S. law explicitly bans just two types of futures contracts: those on onions and those on movie box office receipts, The Hollywood Reporter noted.