Hollywood Studios Ban Betting on Prediction Markets

Prediction markets allow trading on nearly everything, from political outcomes to Hollywood gossip. As these platforms quickly grow in popularity, many industries are warning employees against trading on information that is not public. Now the entertainment industry is sounding the alarm as well.

According to a report by The Hollywood Reporter, employees at studios and production companies have received formal warnings about prediction markets. Employees who break company rules risk losing their jobs. According to the warnings, employees cannot bet on news such as studio earnings, casting decisions, or release dates. Passing this information on to friends and family so they can place bets is also prohibited.

In February, a video editor was fired after making 5,000 dollars in profit by trading on content related to YouTuber MrBeast. The trades were flagged as suspicious because they were statistically unusual.

Bets on who will be the next James Bond on prediction markets were also removed after a sharp surge in activity. While most Hollywood rumors pointed to Jack Lowden as the favorite, heavy money had flowed onto Callum Turner. Integrity monitoring teams expressed concern that a leak could be behind the activity, but the new Bond has not yet been officially announced.

Experts say that television networks and film studios have banned insiders from using confidential information, but that enforcing this rule is nearly impossible. Joshua Mitts, a law professor at Columbia University, says that detecting the vast majority of information-based trades is very difficult, even impossible. According to Mitts, platforms are also working proactively to prevent insider trading because it is in their own interest. In his view, if a platform becomes known as a place where insiders trade, ordinary customers will not want to trade there.