White House staff told not to place bets on prediction markets

White House Staff Advised Against Using Insider Info in Prediction Markets

In late March, White House employees were urged to avoid leveraging confidential details for wagering on prediction platforms. The directive, issued on 24 March, followed President Donald Trump’s decision to halt a potential five-day strike on Iranian energy facilities. The email highlighted recent media reports questioning whether government officials might use unshared data to gain an edge in markets such as Kalshi or Polymarket.

White House Response

White House spokesperson Davis Ingle dismissed the concerns as “baseless and irresponsible reporting,” stating that “any implication that Administration officials are engaged in such activity without evidence is unfounded.” The Wall Street Journal first disclosed the email, which emphasized that federal employees are bound by ethical standards forbidding financial gains from insider knowledge. Ingle added, “The only special interest that will ever guide President Trump is the best interest of the American people.”

Industry Growth and Regulation

Prediction markets, which facilitate over $44bn in trades, have gained traction in recent years. These platforms allow bets on diverse events, from sports to economic policies and local elections. However, bets tied to geopolitical conflicts have sparked discussions about oversight. This week, Democrat Congressman Ritchie Torres wrote to the Commodity Futures Trading Commission, requesting an inquiry into “suspicious” trades.

Recent Scandals

In January, Polymarket faced scrutiny after a trader profited nearly £330,000 from predicting the capture of Venezuelan leader Nicolás Maduro shortly before the event was confirmed. The anonymous account, identified by a blockchain-based code, raised questions about whether it accessed privileged intelligence. Meanwhile, a separate piece of legislation introduced by Democratic leaders in March aims to ban wagers on military actions or war-related outcomes.

Concerns Over Corruption

Senator Andy Kim of New Jersey warned that “corruption and exploitation are thriving within the gaps and loopholes of prediction markets.” He argued that such practices enable a select group to profit at the expense of working Americans. The BBC has sought comments from Kalshi and Polymarket to address these allegations.