Betting on the news raises ethical questions for journalists

Prediction market exchanges have created an environment in which almost any piece of information can be monetized: How well will BTS’s new song perform this week? How hot is Los Angeles? Will Donald Trump be impeached? Users can bet on all of this, and on some platforms, More horrific and violent results In the real world.

The rapid rise and expansion of Polymarket and Kalshi has put newsrooms in a strange position. Prediction market evangelists often claim that their odds are more reliable and accurate than polls and traditional media – effectively positioning the industry as an alternative to news. At the same time, news agencies from Fox News to Associated Press They make trades with prospective market exchanges, and Polymarket and Kalshi are trying to do just that Aligned with independent journalists and Sub-packers Through paid placement deals.

Because prediction markets allow users to monetize news, journalists are caught in the crossfire: 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 encounter while working can be very valuable. Earlier this week, ProPublica announced that it was updating its code of ethics to explicitly state restrictions on how employees can use prediction markets. ProPublica’s Code of Ethics already includes restrictions on how employees can invest in outside companies they cover. but policy It now states that “no employee should bet on the outcomes of news events in prediction markets – regardless of whether or not they participate in 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 concern: condition The Times of Israel The reporter who was threatened by bettors who He asked to update his story To go along with their bets.)

“If you’re covering, for example, a war in Iran, you also shouldn’t take a financial stake in it so you can somehow enrich yourself from news events,” Sorbara says. “Just like you can’t buy stocks, I think we felt like this was almost a natural progression.” This policy applies not only to editorial staff such as reporters and editors, but also to employees on the business side, since everyone is privy to the stories being prepared, Sorbara says.

ProPublica’s policy allows some types of gambling: desk balloting for the Oscars, for example, or sports betting, where legal. Sorbara argues that because the outlet doesn’t actually cover the results of sporting events, sports gambling doesn’t generate much interest. The exception would be if the reporter is working on something like a story about the NFL or another sports league, at which point stricter restrictions may be imposed. I worked on the 2021 story For example, NBA owners could have been banned from betting on basketball games.

The bulk of Kalshi’s trading volume is on sports, but prediction markets weigh in on what is considered a “news event” and what is not. I asked Sorbara whether a ProPublica employee would be allowed to bet on peripheral markets related to the Super Bowl — who will be in the audience, or who will perform.

“The question ‘Will someone perform at an event’ can be informed by thousands of different accounts,” Sorbara says. “There might be an ideological issue: ‘I won’t perform at this event because this organization supports If someone (an employee) asks me, I will tell them not to (bet) on it.”

Not only are the concerns about avoiding conflicts of interest, but the news reported by journalists moves the odds in prediction markets and, in some cases, the coverage itself becomes a betting opportunity. At Polymarket, a trading volume of over $55 million went into the question of who would be named timePerson of the Year for 2025, a selection made by the magazine’s editors.

“TIME’s current policy prohibits employees and their family members from engaging in prediction markets or similar activities that speculate on non-public information obtained through their work at TIME,” said Christine Matzen, a spokeswoman for TIME. Edge In an email message. “This policy also prohibits all employees and their family members from any predictive market activity based on TIME advertising.”

Some media outlets argue that their current rules on conflicts of interest cover activity in prediction markets. EdgeIts ethics statement states: “We do not allow journalists to cover people or companies when they have a personal conflict.”

“My reading now is that the current ethics policy prohibits conflicts of interest, which covers gambling on the news.” Edge Says Editor-in-Chief Nilay Patel. “But if we need to write a more stringent policy specifically for prediction markets, we will keep an eye on things and do so without hesitation.”

Likewise, said Charlie Stadtlander, Executive Director of Media Relations and Communications at… New York TimesHe pointed to me Its current ethical policy Which prohibits employees from making “any form of investment” in “a company, organization or industry that appears or is likely to appear in coverage” with which they deal, including financial derivatives, futures, short selling and speculative debt (the U.S. junior platform Calci and PolyMarket are regulated by the Commodity Futures Trading Commission).

Insider trading is illegal, but its occurrence in prediction markets is almost taken for granted – including by Sponsored influencer content that promotes platforms. The argument that prediction markets reveal what will happen in the future even before the event occurs relies, to some extent, on the presence of insiders on the platforms trading on information that has not yet been made public. Journalists regularly have access to non-public information – news coming under embargo, off-the-record details from sources, or news that has not yet been published. If you throw ethics out the window and aren’t afraid of losing your job, a journalist would be an ideal insider. Polymarket CEO Shane Coplan said it was “remarkable” that his company created an environment where insiders reveal the information they hold. The problem is that, again, insider trading is supposed to be illegal, and actual insiders — like journalists, or Poll workers in Pennsylvania – In theory they are not allowed to trade in the relevant prediction markets. Without insiders, what competitive advantage does forecast market probabilities provide?

Even as employees in the media were banned from trading in prediction markets, newsroom after newsroom announced licensing or advertising deals with these same platforms (not to mention partnerships between MLB and Polymarket, or FIFA deal With unknown platform). Do these outlets view their responsibility differently?

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

“Prediction markets provide only one source of data that journalists can use to tell the story,” Jagger said. “It is used as a supplement to other reporting and data sources, such as opinion polls. It is not a substitute for other sources and has no impact on editorial independence.”

Dow Jones, which publishes The Wall Street Journalentered into a data partnership with Polymarket in January. said spokeswoman Lauren McCabe Edge Via email, the company issued guidance that all employees are prohibited from using confidential business information for trading, and “shall avoid any predictive market activities that might create a conflict of interest” with their work. News employees – as well as their family members – are also prohibited from betting on prediction markets related to their coverage area.
Through deals with legacy news outlets and prominent placement on everything from sports programs to award shows, prediction markets are legitimizing institutional adoption. Sorbara says he finds media deals “weird,” even if they’re like data licensing agreements that happen behind the scenes.

“(The optics) aren’t particularly great for me,” he says. “I think that as journalists, we have a duty to be as fair as possible, and to avoid even the appearance that something suspicious is going on, because we are supposed to be telling the truth here. If people don’t trust us, we will have very little left.”