NEW YORK (AP) — Best Industries fired a Mr. Best video editor this week following insider trading allegations by prediction market operator Kalshi.
Kalshi announced last month that a user who traded about $4,000 in streaming markets related to MrBeast videos with “near perfect” success turned out to be a Beast Industries employee who “had access to potentially non-public information.” Kalshi suspended the editor from his platform for two years, fined him $20,000 and alerted federal regulators.
A spokesman for Animal Industries, which was founded by Jamie Donaldson, said the company of around 500 people had “zero tolerance for this behaviour” and had launched an independent investigation. Jeff Hausenbold, the company’s chairman and CEO, told CNBC that he took action several months ago to ban business from MrBeast employees and competitors for Beast Games, Donaldson’s popular Amazon Prime reality-competition show.
The event places YouTube’s biggest channel, which has risen to fame with Donaldson’s stunt-based challenges that often involve handing out cash, amid debate over whether prediction markets are a form of gambling and how to regulate them. Kalshi is one of the few popular platforms that allow participants to bet on the possible outcomes of events. Bets can be placed on anything from the Super Bowl halftime show to the fall of former Venezuelan President Nicolas Maduro.
An animal industry spokesperson called on Kalshi and other exchanges to share their findings openly. Hausenbold, who previously sat on the board of casino company Caesars Entertainment, told CNBC’s “Squawk Box” last week that prediction markets “are ripe for abuse.” He said, this action definitely looks like gambling, and added that the government should take this decision.
Prediction markets are currently regulated by the Federal Commodity Futures Trading Commission, not state gambling authorities. Critics have said that prediction markets and regulators need to do more to prevent insider trading incidents.
“You can be a third-party cameraman on set and know what the first song in rehearsal is for the singer. You can be the person reviewing the script and know what the end result is,” Hausenbold said. “There’s a lot of information out there and it’s anecdotal and people are taking advantage of it.”
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