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Joe Purvis is an Associate in our Digital Resilience Team and Will Lowe is a Senior Associate in our Investigations, Security and Diplomacy team.
Organisations have never been judged on verified facts alone. However, perceptions and reputations are now increasingly shaped by expectations or possibilities about what may happen next.
Prediction markets, which allow users to speculate on the likelihood of particular outcomes, are one manifestation of this shift. By assigning probabilities to future events, they turn uncertainty into a publicly visible assessment of what lies ahead.
"Whether prediction markets are ultimately right or wrong is almost irrelevant: the reputational challenge is that they can influence behaviour and decision-making in advance of verified information".
Once niche corners of the internet, these platforms are gaining widespread attention, and moving into mainstream financial and political reporting. Recent deals seepublications such as the Wall Street Journal and CNN partner up with leading prediction market sites.
But what happens to reputation when speculation can be packaged as a number and distributed at scale?
Prediction markets, narrative risk and information asymmetry
Prediction markets increasingly create publicly visible probabilities around the future of individuals and organisations. Polymarket, for example, hosts contracts on whether named CEOs will leave their roles and whether particular companies will enter bankruptcy. One recent market invited users to speculate on whether the CEO of Bricks & Minifigs would be fired or resign before 31 July. Whatever the accuracy of the probability, the market itself framed the individual's future as a matter of public speculation.
"Part of the challenge here is that numerical probabilities can appear more objective than commentary or opinion. Stakeholders may view an 80% market prediction as a data-driven assessment rather than a reflection of market participants' assumptions and incentives".
As a result, market odds can become part of the wider narrative surrounding an event. During leadership transitions, M&A activity, regulatory investigations or major litigation, stakeholders may begin reacting to anticipated outcomes rather than established facts. A tradable probability can create the appearance of legitimacy around a contested narrative, encourage media attention and increase stakeholder anxiety, even where the underlying facts remain incomplete or disputed.
We’ve already seen how speculation and rumours online can materially impact a business. During the collapse of Silicon Valley Bank in 2023, as concerns spread rapidly through investor networks and social media, stakeholders acted on expectations about what might happen next, helping to accelerate the crisis.
It’s also important to mention privileged information here – or at least, the assumption that certain market predictions are based on privileged information. This is known as information asymmetry - situations where some people know more than others. Although traditionally viewed through a compliance or regulatory lens, information asymmetry can also shape reputation. Prediction markets can also amplify perceptions that some participants possess information unavailable to others.
Recent allegations that a Google employee used confidential search trend data to place profitable bets on Polymarket illustrate the point. While the case has focused on insider trading concerns, it also highlights a reputational challenge: once stakeholders believe a prediction market may reflect privileged information, price movements can themselves become a source of speculation and narrative formation.
The influence of these markets is only likely to grow in the coming months and years. Recent partnerships have seen outlets including Yahoo Finance and Dow Jones incorporate Polymarket data, while CNN has partnered with rival prediction market platform Kalshi. As these probabilities become more visible, they may increasingly shape how fast-moving events are interpreted and discussed. In some cases, market odds may also be shared out of context to reinforce claims that have yet to be substantiated.
Why organisations should monitor prediction markets - and how they can respond
For organisations, allegations of insider trading can create immediate reputational challenges by raising questions about governance and the protection of sensitive information. But the wider implications of prediction markets for corporate reputation may prove even more significant.
"Any valuable internal dataset capable of shaping external perceptions can become a reputational asset, and a reputational vulnerability".
Search trends, product metrics, campaign performance, user growth figures, internal rankings, moderation decisions, or incident data may all shape narratives if exposed prematurely, or exploited strategically.
For communications and risk teams, prediction markets introduce a new monitoring challenge. Market activity may provide an early indication of emerging narratives, particularly where forecasts concern leadership changes, corporate performance, litigation or regulatory scrutiny.
Organisations need a clear understanding of which internal information streams could distort external narratives if exposed, who can access them, and how unusual online or market signals should be escalated. Prediction markets should also be considered within crisis planning and scenario exercises, particularly where speculation could affect stakeholder confidence before facts are established.
Alongside this, maintaining an authoritative public narrative can help ensure that market speculation is balanced by credible information and provide stakeholders with a trusted point of reference during periods of uncertainty. This narrative should be easy to find, easy to verify, and resilient under pressure.
Prediction markets: An emerging reputational risk
As AI tools and prediction platforms evolve, the distance between confidential information, public speculation and market reaction is shrinking. That raises the stakes for organisations managing reputation in real time.
"Prediction markets should therefore be understood as part of the wider information environment in which reputation is formed, challenged and defended. As well as managing what is known, organisations also need to focus on stakeholders believe may happen next".
Key takeaways
• Prediction markets can influence reputations by turning speculation into publicly visible probabilities.
• Prediction markets are becoming more visible and more influential, increasing their ability to shape public narratives.
• Tradable probabilities can influence stakeholder expectations when the underlying facts are unknown.
• Internal data that affects external perceptions should be treated as a reputational asset as well as a commercial one.
• Organisations should combine governance, monitoring and a clear, trusted public narrative to manage this emerging risk.
