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Prediction markets have created a new challenge for organizations: information that once held value only inside the business may now have immediate financial value outside of it.
Employees, contractors, suppliers, and other insiders can increasingly find opportunities to profit from information they learn through their work. Whether the information involves workforce changes, product launches, acquisitions, executive transitions, or other business events, prediction markets have created new incentives to monetize knowledge before it becomes public.
For ethics & compliance leaders, the good news is that the underlying risks are familiar. Organizations have long managed risks involving confidential information, conflicts of interest, and personal financial gain. Prediction markets do not create entirely new risks—they create new opportunities for familiar risks to emerge, and a chance to talk to employees about them.
While prediction markets continue to evolve and regulatory approaches vary across jurisdictions, the core principles discussed in this blog—protecting confidential information, avoiding conflicts of interest, and maintaining trust—apply regardless of the platform or mechanism involved.
What Are Prediction Markets?
Prediction markets allow participants to buy and sell contracts tied to the outcome of future events. Depending on the platform, users may wager on elections, economic indicators, sports outcomes, awards, product launches, mergers and acquisitions, workforce changes, and countless other events.
Supporters argue that prediction markets aggregate information and improve forecasting. Critics point to a different reality: when financial rewards are attached to outcomes, individuals who possess non-public information may be tempted to use that information for personal gain. A June 2026 Wall Street Journal investigation added a new dimension to that critique, reporting that Polymarket paid content creators to post more than 1,100 videos of fabricated winning bets—collectively viewed over 140 million times—without disclosing the payments, prompting inquiries from the CFTC and Congress.
For organizations, the key concern is not prediction markets themselves. The concern is that these markets create new opportunities to monetize information that employees, contractors, suppliers, and other business partners may obtain through their work.
Why Compliance Leaders Should Care
Information Risk. As noted, prediction markets create new opportunities for employees and third parties to profit from information they learn through their work. Importantly, in many organizations, the population with access to this information extends far beyond the traditional audience covered by insider-trading controls. That means your training and policies probably aren’t broad enough.
Reputational Risk. Even when an organization is the victim of misconduct, its name may still become associated with the incident.
An information leak, misuse of confidential data, or employee misconduct can quickly become a public story. As recent headlines have demonstrated, organizations may find themselves facing scrutiny regardless of whether they played any role in the underlying activity.
Cultural Risk. Prediction markets can create rationalizations that sound familiar to Ethics & Compliance leaders:
- “I’m not hurting anyone.”
- “It’s just a bet.”
- “Everyone already knows.”
- “The company isn’t losing money.”
Techniques of Neutralization
These rationalizations are not new, and they are not unique to prediction markets. Decades ago, criminologists Gresham Sykes and David Matza described this pattern as “techniques of neutralization”—the small justifications people use to excuse rule-breaking without abandoning their own sense of being ethical. Each phrase above maps onto a recognized technique: denial of injury (“I’m not hurting anyone”), denial of a victim (“The company isn’t losing money”), and appeal to social consensus (“Everyone already knows”). Naming the pattern can help Ethics & Compliance leaders design training and messaging that addresses the rationalization directly, rather than simply restating the rule.
The paid, staged videos discussed above are a useful illustration of how these rationalizations can be manufactured externally, not just generated internally. Content designed to suggest that “everyone is winning” leans on social proof and optimism bias, making participation feel normal, low-risk, and already condoned—well before an individual ever has to rationalize using non-public information.
Organizations that rely solely on rules and enforcement may struggle to address these rationalizations. Culture, values, and expectations remain critical components of any effective response.
Six Questions Every Company Should Ask Right Now
1. What information in our organization could become the subject of a prediction-market contract? Organizations should identify their own version of “bettable information” and assess where that information exists within the business.
2. Who has access to that information—inside and outside the organization? Once organizations identify sensitive information, they should determine who can access it. This analysis should include employees, contractors, suppliers, consultants, law firms, financial advisors, and other third parties. The broader the access, the broader the potential risk.
3. Do our policies clearly address the use of confidential information for personal gain? Many organizations already prohibit misuse of confidential information. However, policy language may have been drafted before prediction markets became widely accessible. Organizations should assess whether existing policies clearly communicate expectations regarding personal financial gain derived from non-public information.
4. Would employees recognize prediction-market activity as an ethics and compliance risk? Employees may understand insider-trading rules while failing to recognize prediction-market activity as a similar risk. Training and communications should help employees understand why prediction markets create new incentives, what behaviors are prohibited, and how concerns can be raised.
Questions to consider include:
- Are contracts referencing our company currently available?
- Are contracts referencing our products, executives, workforce, or transactions available?
- Who would be responsible for monitoring these developments?
- How would concerns be escalated?
6. Do we have a process for escalating and investigating concerns? Like any emerging risk, prediction-market activity may require coordination across multiple functions. Organizations should establish clear pathways for reporting concerns, reviewing allegations, conducting investigations, and determining appropriate responses. At least one of the prediction markets has a dedicated webpage inviting people to share information about inappropriate use of confidential information, so check processes and talk to employees before the issue is raised externally.
Author Bio
Erica Salmon Byrne, J.D. | Chief Strategy Officer and Executive Chair, Ethisphere
As Chief Strategy Officer and Executive Chair, Erica Salmon Byrne is responsible for ensuring continuous and strong growth for the company while maintaining Ethisphere’s founding ethos that good businesses do better.
