Gamblers Are Making Big Money Off Your Movie. And It's 100% Legal
New online traders bet on release dates, Rotten Tomatoes scores and box office. Will studios gamify their own business for part of a $1 trillion market?
Matthew Frank is on staff at The Ankler, and previously has written about how Deadpool & Wolverine won Gen Z through piracy, Hollywood’s love affair with Kamala Harris and Jeffrey Katzenberg’s agewashing of President Biden. You can reach him at matthew@theankler.com.
This Ankler Feature is a 16-minute read.
For most people, last May’s IF presented a simple choice: Do I want to take my family to see the John Krasinski-helmed movie starring Ryan Reynolds or not? But for Jonathan Zubkoff, a former pharmaceutical industry veteran who lives in the New York City suburbs, the movie presented a more intriguing question: Can I make money on this?
Specifically, Zubkoff wanted to bet against the prevailing wisdom that this movie would be liked enough by critics to earn at or above a Rotten Tomatoes score of 50 percent.
“IF, I thought it just looked off. It didn’t make sense,” Zubkoff tells me. “The trailer didn’t look good, and then for initial reactions coming out, it premiered in France or something like that. There were all these initial reactions on Letterboxd, and they’re basically like, ‘Oh, it’s The Sixth Sense: Ryan Reynolds is dead; he’s imaginary the whole time.’ I’m just like, that’s the dumbest thing I’ve ever heard.”
So Zubkoff went to a site called Kalshi devoted to “prediction markets” where he bet that IF’s Rotten Tomatoes score would fall below 90 or 85 and so on . . . all the way down to 50.
A week before IF’s release, the highest probability based on market activity was that the film would score as high as 80, which would have sunk most of Zubkoff’s bets. On the Monday after IF opened to what was considered a disappointing $35 million and Hollywood assessed the box-office impact, what Zubkoff cared about was the movie’s Rotten Tomatoes score . . . which settled in at 48 percent, allowing him to cash in.
“I did very well thinking that [the movie] wouldn’t be good,” he tells me, winning $3,054 — again, to be very clear, gambling on the Rotten Tomatoes score of a movie.
If speculating on such a thing seems weird to you, well, get used to it: Since April, when Kalshi launched the ability to predict Rotten Tomatoes scores for money, the platform has taken in roughly $200,000 to $400,000 in bets per week and per movie, and it’s just one in a series of new gambling sites profiting off the failure, victories and even delays in production or release on Hollywood movies. Michael Burns, vice chair of Lionsgate and cofounder of the original entertainment market, Hollywood Stock Exchange (HSX), which launched way back in 1996, tells me, “People are often frightened of anything new. Look at YouTube, look at AI. [Entertainment markets are] here . . . It’s gonna get bigger.”
Burns is right: Entertainment gambling is coming. And very likely in a big way, as some of the experts in the field explain their data sources and how they do it.