Hollywood Studios: New Bans on Insider Betting

Major film studios and production companies are updating internal rules to restrict employee participation in prediction markets. The new guidelines prohibit staff from betting on industry-specific outcomes, such as studio earnings, casting choices, and release schedules. These measures extend beyond traditional insider trading laws to address the rise of speculative betting platforms.

The policies also target indirect participation. Employees are barred from sharing confidential details with friends or family members who might use that information to place wagers. At least one company has set up an anonymous hotline so staff can report suspected rule violations by colleagues. This enforcement tool signals a push to monitor compliance more closely.

Joshua Mitts, a law professor at Columbia University, said the growth of these platforms has forced employers to rethink ethical standards regarding insider information. He noted that the main challenge is now education and compliance. Employers must ensure employees understand what is allowed, even when they are not facing criminal charges.

Parent company PMC, which owns The Hollywood Reporter, has also revised its employee handbook. The update explicitly bans betting on award nominations, production timelines, and casting decisions. This change aligns the publisher with other industry players aiming to curb speculative activity among insiders.

Recent cases have drawn attention to the problem. In February, the platform Kalshi disclosed that a video editor at MrBeast’s company earned $5,000 by betting on confidential content. The company fired the employee and applied a $20,000 penalty. In April, a worker on a CBS competition show was also identified for profiting from similar bets.

Industry sources say opportunities for insider betting remain common. Prediction markets exist for specific outcomes on popular talk shows and variety programs. Many of these shows are pre-taped or feature public audiences, making it hard to distinguish between informed insiders and lucky public bettors.

This week, the betting site BetOnline temporarily suspended its market for the next James Bond actor. The move followed a surge in betting activity for Callum Turner, which displaced the previous favorite. A representative suggested the sudden shift in odds pointed to a potential information leak after recent auditions.

Mitts and Moran Ofir from the University of Haifa estimated that $143 million in anomalous profit was generated on Polymarket over a two-year period. They noted that this figure has likely increased as betting categories have expanded. Mitts argued that betting on entertainment news offers little social utility compared to other forms of market hedging.

The Commodity Futures Trading Commission has invited public comment on which entertainment events should be eligible for trading. The agency indicated that award shows should be allowed because they rely on evaluative judgment. It remains uncertain about game shows and reality competitions, questioning whether they should be classified as gaming.

Tracing bets is difficult for employers, especially on blockchain-based platforms where identities can be obscured. Mitts noted that the entertainment industry is a likely candidate for regulatory scrutiny due to the high potential for insider trading and the low social benefit of such markets.