Hollywood Studios Quietly Ban Staff From Betting on Prediction Markets

Hollywood studios and production companies are quietly circulating rules that bar employees from betting on prediction markets using insider knowledge, according to The Hollywood Reporter. The publication says the documents have appeared in recent weeks, and one company has already set up an anonymous hotline for reporting colleagues suspected of placing bets.

What the rules cover

The restrictions apply to events insiders know about first-hand: studio earnings, casting decisions and release dates. They also cover passing such information to friends or family who then place the bets. Penske Media, The Hollywood Reporter's parent company, has updated its employee handbook to explicitly ban bets on award nominations, casting decisions, production timelines and release dates.

The rules essentially extend long-standing insider trading bans from the stock market to platforms such as Kalshi and Polymarket, where users can bet on everything from who will be cast as the next James Bond to who will be voted off a reality show.

Why enforcement is hard

Joshua Mitts, a Columbia University law professor who studies prediction markets, said employers now have to think about insider trading from an ethical standpoint far more often. Enforcing the rules will be difficult. In his assessment, insiders on blockchain-based platforms can be nearly impossible to trace if they know how to use mixers and hide their identity behind multiple intermediaries.

Bookmakers are reacting too. According to the same publication, BetOnline temporarily pulled its market on the next James Bond after heavy betting pushed Callum Turner ahead of longtime favorite Jack Lowden, raising concerns about a leak.

Precedents and regulation

In February, Kalshi said a video editor at MrBeast's company made about $5,000 using confidential information to bet on the YouTuber's content. He was fired and fined $20,000. US federal prosecutors have also brought cases. In April, an active-duty soldier was charged with using classified information about the operation 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.

State governments are acting as well. California, New York and Illinois have banned state employees from using nonpublic information to bet on prediction markets. The platforms have rolled out their own surveillance tools, and Polymarket has investigated dozens of bets on the US midterm elections.

The report also points to the Onion Futures Act of 1958, under which US law explicitly bans futures contracts on just two things: onions and movie box office receipts.