Hollywood studios are enacting stringent new policies to prevent employees from exploiting confidential information for financial gain on prediction markets, such as Kalshi and Polymarket. At least one major company has introduced an anonymous hotline for reporting suspected violations.
The crackdown addresses the growing concern that entertainment industry insiders could use non-public information about casting decisions, production schedules, studio earnings, and release dates to place bets on the outcome of these platforms. The new rules explicitly prohibit employees from wagering on such sensitive, unreleased details and from sharing this information with others who might place bets on their behalf.
This move represents an expansion of traditional insider trading regulations within Hollywood, which have historically focused on financial markets. With prediction markets allowing bets on a wide range of events, including award nominations and reality television outcomes, the potential for abuse has significantly increased, according to Columbia University law professor Joshua Mitts.
Instances of misuse have already surfaced. In February, a video editor for MrBeast's company was reportedly fired and fined $20,000 for using confidential content information to profit on Kalshi. Additionally, a report in April revealed a worker associated with a CBS competition series allegedly profited from prediction market bets.
The scope of potential insider betting extends beyond studio executives to include television employees, production crews, and even audience members privy to advance information about prerecorded shows. The phenomenon has even impacted betting on high-profile casting rumors, such as the next James Bond, with one betting site temporarily suspending wagers after a surge of bets on actor Callum Turner.
Beyond Hollywood, prediction markets have drawn scrutiny for potential insider trading related to US military operations and political events. A former teleprompter operator for President Donald Trump was reportedly suspended amid an investigation into similar activities on Kalshi. Both Kalshi and Polymarket have stated they are taking measures to combat insider trading, though tracing blockchain-based transactions can be challenging.
Federal regulators are also examining the oversight of prediction markets. While bets on award shows like the Oscars are generally permitted, the Commodity Futures Trading Commission has raised questions about wagers on reality competitions. Furthermore, federal law already prohibits futures contracts tied to movie box office receipts, a restriction in place since 1958.