{
  "id": 4002228,
  "title": "Small Businesses Tap Prediction Markets to Shield Profits From Surprise Costs",
  "url": "https://urgent.news/2026/08/28/small-businesses-tap-prediction-markets-to-shield-profits-from",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-28T17:08:17.000Z",
  "source": {
    "name": "PYMNTS",
    "slug": "pymnts",
    "url": "https://www.pymnts.com/smbs/2026/small-businesses-tap-prediction-markets-to-shield-profits-from-surprise-costs/"
  },
  "original_language": "en",
  "account": "A number of small businesses have started utilizing prediction market platforms to protect their profits from unforeseen expenses, as reported by Reuters on Friday, August 28. These companies often lack the support of Wall Street banks for managing such risks that could potentially jeopardize their operations, according to the report. To mitigate financial repercussions of unexpected events, some small businesses have opted for event contracts available in prediction markets, the report stated.\n\nAn illustration of this is a goat herding firm seeking to manage the risk of soaring labor costs should a gap in a state labor law remain unfixed. Another example is a bar aiming to control the risk associated with its promotional offer of refunds if the local basketball team wins a game. Additionally, a tea company sought a contract that would aid in covering a possible increase in freight costs. The goat herding firm's contract was developed in collaboration by Susquehanna International Group, finance startup Castle Technologies, and prediction market Kalshi, as reported.\n\nEric Passmore, a senior trader at Susquehanna International Group, commented on the report: \"Hedging is not a well-known way to use event contracts yet, but my job is to build out one-off hedging solutions and hedge risks that would previously have been unhedgeable.\" The Castle Technologies founders revealed in an August 10 blog post that clients have sought solutions for risks such as potential tariff fluctuations, removal of tax credits, and court rulings. They also mentioned, \"We have already built relationships with the largest traders on prediction markets, and sourcing capacity for our customers is not a constraint.\" The Castle Technologies team further explained that they have set up infrastructure to expedite their quoting workflows, reducing the time from request to print. PYMNTS reported in January that prediction markets are entering the mainstream, attracting interest from crypto, betting, finance, and major institutions despite regulatory risks. In July, PYMNTS reported that prediction markets are anticipating growth in new financial products. The range of topics available for event contract services has expanded from predicting discrete events to trading continuous exposure to economically significant assets, as stated in the report.",
  "summary": "A handful of small businesses have begun using prediction market platforms to hedge risks, Reuters reported Friday (Aug. 28). Companies of this size can’t get help from Wall Street banks in hedging risks that in some cases could kill their business, according to the report. Some small businesses have turned to prediction markets for event […] The post Small Businesses Tap Prediction Markets to…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}