Betting on the news raises ethical questions for journalists

Predictive market exchanges have created an environment where almost any information can potentially be monetized: How well will BTS’s new song perform this week? How hot will Los Angeles get? Will Donald Trump be impeached? Users can bet on all of that and, on some platforms, more gruesome and violent outcomes in the real world.

The rapid rise and expansion of Polymarket and Kalshi has put the newsroom in an awkward position. Prediction market promoters often claim that their prospects are more reliable and accurate than surveys and traditional media – effectively positioning the industry as a replacement for news. At the same time, from Fox News to news organizations The Associated Press Prediction markets are making deals with exchanges, and Polymarket and Kalshi are attempting to connect with independent journalists and substackers through paid placement deals.

Because prediction markets allow users to monetize news, journalists are left in the lurch: What they report (and the information that goes into reporting) suddenly has a dollar amount attached to it. This also means that the information they gain on the job is potentially very valuable. Earlier this week ProPublica announced it was updating its code of conduct to more clearly spell out restrictions on employees using prediction markets. ProPublica’s code of conduct already contains restrictions on how employees can invest in outside companies they cover. But the policy now states that “No employee should bet on the outcome of news events in prediction markets – regardless of whether or not they are involved in the coverage of said event.”

Diego Sorbara, assistant managing editor at ProPublica, said the outlet began discussing the issue after reports that some Polymarket users had made hundreds of thousands of dollars betting on military action in Iran. (Also a matter of concern: the case of israel time The reporter was threatened by bookmakers who demanded that he update his story to suit their bets.)

“If you’re covering, let’s say, the war in Iran, you shouldn’t even have a monetary stake in it just so you can somehow enrich yourself from news events,” Sorbara says. “Just like you wouldn’t buy a stock, I think we felt it was almost a natural progression.” Sorbara says the policy applies not only to editorial staff like reporters and editors, but also to staff on the business side, making sure everyone is aware of what story is being worked on.

ProPublica’s policy allows some gambling: for example, an office Oscar ballot, or sports betting, where legal. Sorbara argues that since the outlet does not actually cover the results of the sporting event, sports gambling is not of much concern. The exception would be if a reporter was working on a story about the NFL or another sports league, at which point stricter restrictions may apply. For example, a reporter working on a 2021 story about NBA owners avoiding taxes may have been barred from betting on basketball games.

The vast majority of trading volume on Kalshi is on sports, but prediction markets complicate what is and what is not a “news event.” I asked Sorbara whether ProPublica staffers would be allowed to place bets on peripheral markets related to the Super Bowl — who would be in the crowd, or who would perform.

“‘Will someone perform at an event’ can be informed by thousands of different calculations. It can be [that] There’s an ideological issue: ‘I’m not going to perform at this event because it supports organization X,’ or ‘This league has taken Y position in the past,'” Sorbara says. “Suddenly it smelled like news to me. if someone [on staff] Asked me, I would tell them not to do it [bet on] He.”

The concerns are not just about avoiding conflicts of interest – news reported by journalists adversely impacts prediction markets, and in some cases, the coverage itself becomes an opportunity to place bets. On Polymarket, more than $55 million of trading volume went into the question of who will be nominated Time2025 Person of the Year, selected by the magazine’s editors.

Spokeswoman Kristin Matzen explained, “TIME’s existing policy prohibits employees and their family members from participating in prediction markets or similar activities that involve speculating on non-public information obtained through their employment at TIME.” The Verge In an email. “This policy prohibits all employees and their family members from any predictive market activity based on TIME announcements.”

Some news outlets view their existing rules regarding conflicts of interest as covering activity on prediction markets. The VergeIts ethics statement states: “We do not allow journalists to cover people or companies where they have personal conflicts.”

“As of right now I have read that the current ethics policy prohibits conflicts of interest when covering gambling on news,” The Verge Editor-in-Chief Nilay Patel says. “But if we need to write a strict policy specifically for prediction markets we will keep an eye on things and do so without hesitation.”

Likewise, Charlie Stadtlander, executive director of media relations and communications the new York Timespointed me to its existing ethics policy that prohibits employees from making “investments of any kind in any company, enterprise or industry” that they handle or are likely to be involved in the coverage of, including derivatives, futures, short selling and speculative lending (Kalashi and PolyMarket’s smaller US platform is regulated by the Commodity Futures Trading Commission).

Insider trading is illegal, but in prediction markets it is almost taken as a given that it happens – including by promoting platforms through sponsored influencer content. The argument that predictions of what will happen in the future before an event even occurs depends in part on the fact that insiders on the platform are trading on information that is not yet public. Journalists regularly have access to non-public information – news that is under embargo, off-the-record details from sources, or news that has not yet been published. If you’ve thrown aside ethics and aren’t afraid of losing your job, a journalist would be an ideal insider. Polymarket CEO Shayne Coplan has said that it is “good” that his company creates an environment where insiders disclose information they have. The problem is that, again, insider trading is considered illegal, and actual insiders – like journalists, or poll workers in Pennsylvania – are theoretically not allowed to trade on the relevant prediction markets. Without insiders, what competitive edge do prediction market prospects provide?

Even though employees of media outlets are banned from trading on prediction markets, newsroom after newsroom has announced licensing or advertising deals with these same platforms (not to mention the partnership between MLB and PolyMarkets, or FIFA’s deal with little-known platforms). Do these outlets understand their responsibilities differently?

CNN, which has a partnership with Kalshi, prohibits its staff from betting on prediction markets and includes disclosures in stories about the industry, spokeswoman Anna Jaeger said in an email.

“Prediction markets provide just one source of data that journalists can use to tell a story,” Jagger said. “It is used to complement other reporting and data sources, such as polling. It is not a replacement for other sources and has no impact on editorial independence.”

Dow Jones, which publishes wall street journalentered into a data partnership with Polymarket in January. Spokeswoman Lauren McCabe said The Verge The company has issued guidance that all employees are prohibited from using confidential work information for trading, and should “refrain from any predictive market activities that could create a conflict of interest with their work,” it said via email. News staff – as well as their family members – are also barred from betting on prediction markets related to their coverage area.

Through deals with legacy news outlets and prominent placement on everything from sports broadcasts to awards shows, prediction markets are working to legitimize themselves for institutional adoption. Sorbara says he finds media deals “weird”, even if they resemble behind-the-scenes data licensing agreements.

“[The] The optics aren’t particularly great for me,” he says. “I think as journalists, we have a duty to be as unbiased as we can, and even avoid the appearance that there’s something suspicious going on, because we’re the ones who are supposed to be telling the truth here. And if people can’t trust us, there’s very little left for us.”