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Betting on people: the rise of prediction markets as a reputational attack platform

September 2026
 by Atticus Evans-Lombe

Betting on people: the rise of prediction markets as a reputational attack platform

September 2026
 By Atticus Evans-Lombe

In August 2025, American restaurant chain Cracker Barrel changed its longstanding logo. The backlash to this decision was fierce, the share price fell, and the company changed its decision within a week.  Just days later, prediction market site Kalshi opened a contract asking a simple yes or no question: would Cracker Barrel CEO Julie Felss Masino still be in her position on 1 January 2026? Over four months, this specific market logged more than 77,000 transactions betting on the outcome of this question. During this time, anyone could view a live percentage representing the market’s confidence that Masino would leave.

Masino faced no allegations of misconduct, but a live number now existed against her, which could be screenshotted, cited, and indexed, and was updated by the second. Although she survived in her role until July 2026, Masino’s situation highlighted the large role that prediction markets could play in future reputational attacks; while the internet has long had opinions on people, now it has odds on them. 

Prediction markets are platforms on which users trade contracts tied to the outcome of a future event, expressed as a yes or no question. The price of each contract acts as a live percentage probability of that particular event happening. On most sites, for example, if a ‘Yes’ contract costs 75 cents for an event, it means the market estimates a 75% chance it will happen. Over the past year, these platforms have exploded in size and scale: according to Pew Research Center, trading volumes on Kalshi and Polymarket, the world’s largest prediction markets, rose from less than USD 5 billion in September 2025 to USD 24 billion in April 2026.[1] This scale has given prediction markets a sense of authority.

The size of the platforms also presents a problem for those seeking to manage their reputational risk. Almost anything can be wagered on these sites: the timing of a CEO’s departure, the outcome of litigation, the date of a business acquisition. Such bets on prediction markets, expressed as a percentage based on thousands of wagers from members of the public, do not read like unsubstantiated gossip, but as a genuine representation of market confidence.

Speculation on company information has long been in itself a reputational risk, and the issue of confidentiality comes two-fold in relation to prediction markets, which have faced numerous allegations of insider trading being carried out on their platforms.  A cluster of confident wagers in relation to a business or an individual may indicate that someone with access to non-public information is attempting to monetise it illegally. Equally, it could simply be the actions of a hostile party manufacturing the appearance of insider knowledge. From the outside, both scenarios are indistinguishable and can generate the same negative headlines. Any insinuation of insider trading or similar misconduct can cast a company or person in a negative light; even if they are unsubstantiated, such allegations may raise questions and undermine public confidence. When such information enters the digital space, the reputational damage it causes can be lasting.

A further problem is how easily, and cheaply, such an effect can be engineered on these sites. Reuters has reported how new contracts can be listed on prediction markets through ‘self-certification’ – that is, there is less requirement for approval from an external regulator, as in a traditional financial market. Hostile actors can therefore easily create inauthentic contracts speculating on issues which may undermine the reputation of a business or an individual. These wagers could then be supplemented by further tactics, such as coordinating with other hostile actors to move prediction market prices and then frame those shifts as proof that a certain controversial outcome is likely or inevitable. Engineered pessimism may be used as a lever to influence media coverage, investor sentiment, or public opinion on any individual or company. Such patterns replicate those of coordinated inauthentic behaviour (CIB) networks – however, via prediction markets, they may acquire the sheen of a legitimate financial instrument. Prediction markets do contain mechanisms for reporting suspicious trading activity, but in the context of reputational harm, the weakness of such a defence is clear. A market price is not a statement of fact, so it is not defamatory, and nor is there a publication to issue a reply to. 

A final concern is the murky regulatory picture. Prediction markets contend with either bans or restrictions in several jurisdictions, including the UK, Belgium, Spain, and Australia. Such bans can be more theoretical than real, however, as users in the UK and other countries can avoid restrictions by using Virtual Private Networks (VPNs) and cryptocurrency wallets, which do not impose the identity checks required by banks. Although there are reports that these sites are attempting to crack down on such circumvention, finding the identities of anyone wagering on prediction markets, let alone actively hostile parties using the sites, can remain a difficult task.

The multi-faceted risk prediction markets now pose to those seeking to safeguard their reputations means they must be treated as a monitoring obligation. Companies and individuals should anticipate the scenarios likely to attract contracts – such as executive turnover or an imminent acquisition – because these platforms themselves do not have built-in defences to identify suspicious trends in investing. And these companies and individuals also need to prepare a response, because prediction markets do not need to be right about someone in order to damage reputations. They simply need to be visible, quotable, and unanswerable – and right now they are all three.


 

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