White House staff told not to place bets on prediction markets

White House Staff Advised Against Using Insider Data in Prediction Market Wagers

In early March, White House personnel were advised to avoid leveraging confidential data for financial wagers on forecasting platforms. The directive, issued on 24 March, followed President Donald Trump’s announcement of a five-day halt to his plans for attacking Iranian power facilities and energy systems. The email addressed concerns raised by press reports suggesting government officials might exploit unreleased information to place bets on platforms such as Kalshi or Polymarket.

Government Ethics Guidelines and Institutional Response

White House spokesperson Davis Ingle defended the move, stating that “any implication that Administration officials are engaged in such activity without evidence is baseless and irresponsible reporting.” The Wall Street Journal first disclosed the email, prompting further scrutiny. Ingle emphasized that all federal employees adhere to ethics rules designed to prevent the misuse of insider information for profit.

Controversy Over Prediction Markets and Financial Gains

Polymarket faced investigation in January after an anonymous trader reportedly profited nearly half a million dollars from a bet on the capture of Venezuelan president Nicolás Maduro. The bet was placed shortly before the event was confirmed, raising questions about whether the trader had access to privileged intelligence. The account’s blockchain identifier, a mix of letters and numbers, added to the mystery.

The BBC has reached out to Kalshi and Polymarket for clarification. Prediction markets, which handle over $44bn in trades, have gained traction in recent years. These platforms allow users to wager on a wide range of events, from sports outcomes to economic decisions like Federal Reserve rate cuts or local election results.

Regulatory Concerns and Legislative Actions

This week, Democrat Congressman Ritchie Torres, a member of the House Financial Services Committee, wrote to the Commodity Futures Trading Commission, urging an inquiry into “suspicious” trades. The commission oversees derivatives markets, which include prediction platforms. In March, Democratic leaders proposed legislation to entirely restrict betting on conflicts or military operations.

“Corruption and exploitation are thriving right now within the gaps and loopholes of prediction markets,” said US Senator Andy Kim of New Jersey. “This manipulation leaves the select few winning big, at the expense of working Americans,” he added.