News
If You Can Bet on the World Cup, Why Not on What You Know at Work?
Alex Woodcock | 23 July 2026
This is part one of a two-part series on prediction markets.
The 2026 World Cup concluded last week with a victory for Spain. And for prediction-market platforms like Kalshi and Polymarket, the tournament was the busiest stretch in their short history. Kalshi alone reportedly gained 3 million new users and traded $1.2 billion in contracts on the winner of the World Cup alone, and saw 70% month over month increase to $31 billion in notional volume for the month of June.
Behind the spectacle sits a question the asset-management industry has begun to ask: as these markets expand beyond sport into the kind of information that firms hold every day, do the controls built for an earlier world still reach the conduct?
What is a Prediction Market?
A prediction market is typically an online platform where people trade contracts tied to the outcome of a future event. The CFTC explains that, “Event contracts are often based on yes-no scenarios…This framework also has a fixed payout (usually $1) and an expiration…”
Sporting events continue to drive most of the volume, which is part of why the platforms might register with most as entertainment. But the same platforms already carry contracts on politics, economic releases, and financial outcomes, and those categories are growing. As the category expands beyond sports, it reaches into exactly the kind of information a firm may routinely hold.
As the payouts are collected and the confetti gets swept away at the MetLife Stadium, there is an honest question that individuals within your organizations may already be asking themselves.
If I can use an app or a website to take a position on a football match, why not on an interest-rate decision, an economic release, or a company's own numbers? It is a fair question, and more consequential for asset managers and the firms that serve them than first appears.
What Has Changed?
This is no longer a fringe curiosity, for individuals or the regulators. In 2026, the first criminal and civil cases tied to prediction-market trading were brought, and tellingly, not against senior executives.
One involved a software engineer at a large technology company who allegedly used routine confidential internal analytics data to take positions on contracts tied to that data, profiting more than $1 million before the information became public. Another involved a government insider trading on confidential knowledge of an operational matter. These cases are still few and early. The significance is the fact pattern, not the volume.
The through-line that should concern compliance teams is captured in a single idea: the information that creates exposure is now mundane and widely held. The person with access was not in the C-suite, and the information was not a classic secret. It was operational data that no policy had ever flagged as trading sensitive.
Why is it an Industry Problem, Not a Sports Betting One?
If the information is that ordinary, the instinct is to file prediction markets under "employees gambling on their own time." The real exposure is different, and wider than it looks. Because an event contract can be written on almost anything — headcount, shipment volumes, search trends, fund flows, a corporate-action outcome — the population of people holding potentially tradeable information expands sharply.
Asset managers — and the administrators, transfer agents, custodians, and other service providers around them — hold exactly this kind of information as a matter of course. The response, then, may not stop at a firm's own staff; it can extend to the diligence and contractual assurances a firm seeks from the providers who hold the same data.
The Real Difference: Information and Duty
The difference between betting on the World Cup final and betting on your own company is not the act of predicting. It is the information you hold and the duty you owe.
A wager on a match you have no special knowledge of is just that. Taking a position on an event when you possess confidential information about that event, in breach of a duty to keep it confidential, is much closer to insider trading.
In the United States, some regulators are treating it that way; through the commodities framework rather than the securities one. The prediction market contracts are being treated as swaps, and the misconduct is a breach of confidentiality. The product may look like a wager, but trading on confidential information can still be actionable misconduct.
Part of what makes the sports analogy so disarming is that the platforms are built to feel exactly like sports betting, the same interface, the same "entertainment" framing. The instinct that stops an industry participant from trading on obvious inside information may never fire when the position looks like harmless entertainment during a tournament.
And the treatment is not uniform around the world. Outside the U.S., others have been reaching varying conclusions on how the increasingly popular platforms should be regulated. Some, such as in the U.K., would treat these products as gambling and regulated by the U.K.’s Gambling Commission; in the European Union, certain event contracts that qualify as financial instruments are considered derivatives and would be subject to a retail prohibition.
For a firm operating across borders, the same product may be a regulated swap in one jurisdiction, a gambling product in another, and a restricted retail derivative in a third. Notably, most of this attention appears aimed at the retail public and at classifying the product — not at conduct inside regulated firms, which is part of why the industry-conduct question remains largely unaddressed.
You Are Not Starting From Zero
The schemes are new; the tools to address them are largely ones compliance teams already own. No rule yet tells firms how to treat event contracts as a personal-trading matter, but the enduring duties — to protect confidential information, to supervise, to act as a fiduciary — already support an evolved response.
At this stage, the work is to re-point existing machinery, not to build a new regime. Measures firms might consider include:
- Extending the code of ethics and personal-trading policy to cover event contracts whether by disclosure, pre-approval, or restriction;
- Reviewing the insider-trading and MNPI policy and considering information governance and data classification;
- Communications surveillance and monitoring, adding the platform names to the lexicon, exactly as firms did for off-channel messaging;
- Information barriers and need-to-know access, limiting who holds the tradeable data in the first place;
- VPN and device policies; and
- Training and attestations
A one-size-fits-all approach likely won't work — policies and controls must be tailored to the firm's specific business given the breadth of these markets.
And there are two potential blind spots that deserve attention, because they are where the old tools could fall short in controlling the risk emerging from the new fact pattern. A personal-trading policy written around the word "securities" may not, by its terms, reach event contracts at all; and lexicon surveillance catches mentions, not conduct deliberately routed through pseudonyms, VPNs, and crypto, which is how the early cases were structured. Re-pointing these tools is the right move; assuming they already reach this conduct is not.
Which brings us back to the real question underneath the sports analogy. It was never whether you can bet. It is whether you understand what knowledge you would be betting with, and whether policies written for an earlier world still reach the behavior.
Part 2 of this series will take up the harder question underneath this one and underneath other fast-moving risks like it, from artificial intelligence to blockchain-based assets: how should a compliance function act when the rulebook has not yet caught up?