- The White House warned staffers against placing bets on prediction marketers.
- Reports have surfaced of government officials using insider information to make wagers.
- There was a flurry of activity on prediction market platforms ahead of the ceasefire with Iran.
A day after President Donald Trump announced a pause in strikes on Iran’s power plants amid talks with Iran, the White House told staffers not to place bets on prediction markets with nonpublic information.
CBS News reported that an email went out from the White House Management Office on March 24.
“Recent press reports have raised concerns about government officials using nonpublic government information to place wagers on online prediction markets such as Kalshi or Polymarket,” according to the mail.
It noted that it’s a “criminal offense for anyone to use nonpublic information to buy or sell these contracts,” and that “government ethics regulations prohibit the use of nonpublic government information for the private benefit of an employee or any other third party.”
“All White House employees are reminded that the misuse of nonpublic information by government employees for financial benefit is a very serious offense and will not be tolerated.”
The Wall Street Journal first reported on the existence of the email.
A flurry of betting and trading
The Associated Press reported Wednesday that a group of new accounts on Polymarket made highly specific, well-timed bets on whether the U.S. and Iran would reach a ceasefire on April 7. Those new users made hundreds of thousands of dollars in profits.
The bets were made even though in the hours before the two-week ceasefire was announced Tuesday, Trump’s words had escalated and signs of an imminent deal with Iran were few, per the news outlet. Trump earlier in the day had warned on social media that “a whole civilization will die tonight” if Iran did not meet his demand to open the Strait of Hormuz by his 8 p.m. ET deadline.
AP analyzed publicly available blockchain data from Polymarket using the crypto analytics platform Dune to determine that at least 50 accounts, or wallets, placed substantial “Yes” bets Tuesday before Trump announced the ceasefire in a Truth Social post at around 6:30 pm ET.
Also, just minutes before the announcement, there was a spike in oil futures trading, according to Bloomberg News and the Financial Times, leading to concerns of potential insider trading.
White House spokesman David Ingle said in a statement, “President Trump has been crystal clear: While he seeks a strong and profitable stock market for everyone, members of Congress and other government officials should be prohibited from using nonpublic information for financial benefit. The only special interest that will ever guide President Trump is the best interest of the American people.”
“All federal employees are subject to government ethics guidelines that prohibit the use of nonpublic information for financial benefit,” he said. “However, any implication that administration officials are engaged in such activity without evidence is baseless and irresponsible reporting.”
Legislation aimed at insider trading
Several members of Congress, including Sen. John Curtis, R-Utah, and Rep. Blake Moore, R-Utah, have introduced legislation to more strictly regulate prediction markets.
“It’s highly unlikely that these are good-faith trades; it’s much more likely that these are insiders with access to information ahead of the public. Without some kind of restrictions, there is nothing stopping government or military officials from profiting from their positions,” Moore said in a statement Wednesday.
Earlier this year, Polymarket faced intense criticism after some of its users made substantial bets ahead of the war in Iran and the military action in Venezuela. Users appeared to have profited from knowing in advance that Trump was going to take military action in those countries.
Just hours before the U.S. military strikes in Iran, more than 150 accounts made investments of over $1,000 in event contracts based on the timing of the strikes, with six traders together making more than $1.2 million, according to Moore in a Deseret News op-ed.
His bill would require the CFTC to prohibit event contracts related to terrorism, assassination, war, sports or athletic competitions and criminal behavior.
Trump administration backs prediction markets
The Trump administration has been a strong supporter of prediction markets as several states have taken Polymarket and Kalshi to court, arguing states, not the federal government, regulate gambling inside their borders. Currently, the Commodity Futures Trading Commission, which historically monitored futures contracts on things such as livestock, crude oil and gold and silver prices, oversees prediction markets.
CFTC chair Michael Selig has said the Trump administration is ready to back prediction market companies as they battle state regulators.
Prediction market companies are “absolutely” doing everything they can to stop federal legislation, I. Nelson Rose, an emeritus law professor at Whittier College and expert on gambling law, told the Deseret News last month. “And I’ll make my prediction that Congress won’t act on it,” he said, citing the Trump family’s involvement in the industry.
Trump’s son, Donald Trump Jr., has invested in Polymarket through his venture capital firm and is a strategic advisor for Kalshi.