Prediction Markets Permit Employees To Wager On Anything At Any Time: What Employers Need To Know

Whether grabbing headlines with multi-billion-dollar valuations or dominating popular culture by being featured on South Park and 60 Minutes, the rapid rise of prediction markets cannot be ignored – particularly by employers.

Prediction markets allow anyone to wager on literally anything at any time from a mobile device or computer. At its core, a prediction market is a platform where users can bet on the outcome of future events by buying and selling shares in the predicted outcomes or likelihood of those events like sports results, elections, or entertainment awards akin to futures contracts on commodities or stocks.

Such wagering was largely prohibited by federal law until the Commodity Futures Trading Commission (CFTC) adopted a hands-off regulatory approach under the new administration, resulting in approximately $28 billion traded on prediction markets in 2025.

Today's bets or "predictions" are not limited to sports and elections. They can also include a company's personnel decisions, product launches, and even sensitive health information of coworkers. For example, real money has or currently is being staked on the following:

• The date a private company's CEO will resign
• The date a tech company's new app will launch
• What key words will be said during a national retailer's quarterly earnings call
• Which companies will announce an IPO in 2026
• What flavor a tobacco company will launch this month

The universe of employees who may have access to such information is vast. As such, traditional confidentiality agreements may not necessarily prevent sensitive information being used for profit by employees or their friends and family. Additionally, employees may not have adequate notice under existing employer policies about the use of prediction markets. Nor may employees understand the potential legal risks involved from capitalizing on insider information, which in and of itself, is in limbo as the CFTC and the Securities and Exchange Commission (SEC) have not yet set forth a clear regulatory framework for prediction markets.

Given the proliferation of prediction market trading, employers may consider adopting or updating policies to implement appropriate guardrails.

For example, employers may want to consider revising Internet and mobile device use policies to specifically block, restrict, or prohibit the use of prediction markets on company devices, using company resources, or while on company time to protect company information and minimize distractions and loss of productivity. Maintaining policies with clear expectations helps put employees on notice of what is and is not permissible.

Additionally, existing non-disclosure or confidentiality agreements may require updating to account for the emergence of prediction markets and to expand the scope of protected confidential information as well as permissible disclosure.

Employers may also consider monitoring prediction markets for wagers on their company's information. Although prediction market users can enjoy some level of anonymity, large swings on discrete events may alert an employer to the disclosure of confidential information.

There is no one-size-fits-all approach, and given the relative newness of prediction markets entering the mainstream, employers should consult with counsel when adopting new policies and updating employment agreements to better protect the company and ensure compliance with local, state, and federal laws.

Footnote

* Steve Silver is Chair of the Maine Gambling Control Board. Any opinions expressed in this article are his alone and do not reflect any positions by the Board.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.