White House staff told not to place bets on prediction markets
White House Staff Advised Against Using Insider Info for Prediction Market Bets
Last month, the White House issued a directive advising staff against leveraging confidential data for trades on prediction platforms. The memo, dated 24 March, followed President Trump’s announcement of a five-day halt on his plan to target Iranian power plants and energy systems. It highlighted recent media reports suggesting officials might exploit non-public information to wager on platforms such as Kalshi or Polymarket.
White House spokesman Davis Ingle defended the move, stating that “any suggestion of Administration officials engaging in such activity without proof is unfounded and careless journalism.” The Wall Street Journal broke the story on Thursday, revealing the memo. Ingle emphasized that all federal employees must follow ethical standards to prevent misuse of insider knowledge for personal profit.
History of Controversy in Prediction Markets
In January, Polymarket faced scrutiny after an anonymous trader profited nearly half a million dollars by predicting the capture of Venezuelan leader Nicolás Maduro before the event was confirmed. The account’s blockchain ID, a mix of letters and numbers, sparked questions about whether the bet was based on insider intelligence from a U.S. military operation.
Prediction markets, which handle over $44bn in trades, have gained traction in recent years. These platforms allow bets on diverse events, from sports to political outcomes, including decisions by central banks or local elections. However, trades on conflicts have intensified discussions about regulation and transparency.
Legislative and Regulatory Push for Oversight
This week, U.S. Congressman Ritchie Torres, a Democrat on the House Financial Services Committee, urged the Commodity Futures Trading Commission to investigate “unusual” trades. The commission oversees derivatives, which include prediction markets. Earlier in March, Democratic leaders proposed a bill to ban bets tied to military actions or wars.
“Corruption and exploitation are flourishing in the gaps and loopholes of prediction markets,” said New Jersey Senator Andy Kim. “This manipulation allows a select group to win big while working Americans suffer.”
The BBC has reached out to Kalshi and Polymarket for further clarification on the matter. As the debate grows, the question remains whether these markets should be held to stricter ethical standards to prevent abuse of insider information.
