White House Staff Warned Against Using Insider Info for Prediction Market Bets

White House staff received a warning last month about the risks of using insider information to place bets on prediction markets. The email, sent on 24 March, followed US President Donald Trump's announcement of a five-day pause on his threat to attack Iranian power plants and energy infrastructure.

The warning was prompted by press reports raising concerns over government officials using non-public information to place bets on platforms like Kalshi or Polymarket. White House spokesman Davis Ingle responded to the reports, stating that "any implication that Administration officials are engaged in such activity without evidence is baseless and irresponsible reporting."

Regulation and Concerns

All federal employees are subject to government ethics guidelines that prohibit the use of insider information for financial gain, according to Ingle. He added, "The only special interest that will ever guide President Trump is the best interest of the American people."

Prediction market platform Polymarket faced scrutiny in January after a gambler made nearly half a million dollars on the capture of Venezuelan president Nicolás Maduro just before it was officially announced. The incident raised concerns about whether the gambler had benefited from inside information of the US military operation.

Prediction markets allow users to place bets on a wide range of topics, including sports, interest rates, and election results. However, bets on conflicts have sparked debate over how the industry should be regulated. US Congressman Ritchie Torres, a Democrat, has called for an investigation into "suspicious" trades, while Democrat leaders have introduced legislation to ban prediction market betting related to war or military action.

US Senator Andy Kim from New Jersey criticized the current state of prediction markets, saying, "Corruption and exploitation are thriving right now within the gaps and loopholes of prediction markets. This manipulation leaves the select few winning big, at the expense of working Americans."