White House staff told not to place bets on prediction markets

Warning from the White House

It has been reported that White House staff were warned on 24 March not to use insider information to place bets on prediction markets — a memo sent a day after President Trump announced a five-day pause on threats to strike Iranian power plants. The warning, first revealed by the Wall Street Journal, referred to press reports raising concerns about government officials using non-public information on platforms such as Kalshi and Polymarket. White House spokesman Davis Ingle told the BBC that "any implication that Administration officials are engaged in such activity without evidence is baseless and irresponsible reporting," and reiterated that federal ethics rules bar using insider information for financial gain.

Prediction markets in the firing line

Prediction markets have exploded in popularity — hosting more than $44bn in trades across topics from sports to monetary policy — but bets on geopolitical events have sparked particular alarm. It has been reported that Polymarket came under scrutiny in January after an anonymous account allegedly made nearly $500,000 on the capture of Venezuela’s Nicolás Maduro just before the news broke, a trade that prompted questions about who had advance knowledge. Should markets be allowed to trade on war and coups? Many argue it’s playing with fire; others say markets simply price information.

Political fallout and calls for oversight

Lawmakers are paying attention. Congressman Ritchie Torres has asked the Commodity Futures Trading Commission to investigate "suspicious" trades, and Democratic leaders this month introduced legislation that would ban prediction-market betting on war or military action. "Corruption and exploitation are thriving right now within the gaps and loopholes of prediction markets," Senator Andy Kim warned, blunt and unambiguous. Regulators now face a choice: tinker around the edges or move in for a fuller crackdown — and for an industry that promised crowdsourced insight, this is the kind of spotlight no platform wants.

Sources: bbc.co.uk, Hacker News