Smurfed: Inside the Rotten Tomatoes Market Weaponizing 1-Star Reviews
How an Aussie critic enriched top bettors on Kalshi, feeding a ‘degenerate economy’ that threatens any studio's best laid plans
Matthew Frank previously wrote about studios courting Gen Z and Alpha with IRL IP-driven experiences, the AI wars at top film schools, and where Participant execs landed a year after the company imploded. Reach him at matthew@theankler.com
Before any movie critic in the U.S. had seen Paramount’s new Smurfs movie, The A.U. Review’s Peter Gray got a look at what he termed the “truly bizarre kids flick,” giving it one star out of five on Rotten Tomatoes.
Gray, an approved critic on the site, was the first of four reviewers to weigh in from Australia and New Zealand, where Smurfs opened a week earlier in the U.S. to align with school holidays. Two takes were positive and two were negative, contributing to a mixed consensus in the lead-up to the North American review embargo lifting last Wednesday. Eventually, once 74 more reviewers tacked on their reviews, that mixed sentiment coalesced into a distinctly negative one, contributing to a critics score of 21 percent for the animated feature.
None of this bore any direct weight on the film, which opened this weekend to a soft $11 million at the North American box office, right around its tracking at $10 million to $12 million. But for a coterie of gamblers, the incremental shifts in consensus among Gray and his fellow Rotten Tomatoes critics had a huge impact. Jonathan Zubkoff, a former pharmaceutical industry execs who lives in the New York City suburbs and is now a full-time bettor on the prediction market Kalshi, scored $8,425 wagering against the film hitting 25, 35, 40, 45 and 60 percent increments. A nice haul, but just a fraction of the $290,000 he’s made betting on Rotten Tomatoes scores in the last year and three months.
How did he do it? An early alert from another trader, Minnesota IT worker Caleb Davies (who netted $12,158 on Smurfs) — along with what Zubkoff and some of his RT gambling buddies term “The Peter Gray Test.”
“If this guy doesn't like something, it's probably really bad,” Zubkoff says of the Aussie critic, who’s given out one star only four times, his last coming on Hurry Up Tomorrow, The Weeknd’s film which landed at a 14 percent on Rotten Tomatoes. “He's a good bellwether critic.”
Gray’s especially low mark gave Zubkoff confidence that Smurfs would bomb critically (which was also pretty clear from the tracking and the conversation around Hollywood), and he cashed in accordingly. Gray, meanwhile, works a full-time retail job while pursuing film criticism, which he’s done over the last 15 years, the last six of which have been as an approved RT critic.
“I don’t know many critics that make a lot of money off of writing,” Gray says, “so it is amusing to me there’s someone else making hundreds of thousands of dollars off something that I basically do for free, and for the love of it.”
Of course, the perceived quality of a film is the key factor driving Rotten Tomatoes scores. But as “The Peter Gray Test” proves, taste is subjective, and the taste of — in Smurfs’ case — 78 approved critics, many of whom do it as a second job like Gray, is the determining factor in million-dollar betting swings. It’s all part of a gambling apparatus that has drawn in big bucks ($1.2 million on Smurfs, over 10 percent of the film’s domestic opening weekend box office).
In its latest funding round, Kalshi is valued at $2 billion; Polymarket, an offshore prediction market site where people can bet on opening weekend box offices (the practice was outlawed in the U.S. in 2010, but Americans can access it through a VPN), is set to raise funding at a $1 billion valuation. Sports and politics are the primary engines driving these sites. But whether Hollywood projects succeed or not — critically and commercially — is baked into the cake, and has revved up in wager amounts over the last year. Not coincidentally, MoviePass, the subscription ticketing service, secured a $100 million capital investment in May to develop a real-money box office daily fantasy league housed on blockchain.
As prediction markets turn Rotten Tomatoes scores into multi-million-dollar wagers, Hollywood studios are facing a new kind of risk: early reviews — even from obscure critics — that move markets, shape perception, and contribute to a film's critical and commercial narrative before it even opens. With no financial upside and limited control, studios now find themselves exposed in a fast-growing ecosystem where bad buzz is profitable — and as Smurfs just proved, the stakes are anything but imaginary.
I’ve reported on this space before and interviewed Kalshi’s CEO and co-founder Tarek Mansour earlier this year, but today I’m revealing what every Hollywood marketing team needs to know: