White House staff have been warned to not use insider information to place bets on prediction markets. This warning was issued via email on March 24, after President Donald Trump announced a five-day pause on his threat to attack Iranian power plants and energy infrastructure. It referenced reports that raised concerns about government officials using non-public information to place bets on platforms like Polymarket and Kalshi.
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.” Ingle also said that all federal employees are subject to government ethics guidelines that prohibit the use of insider information for financial gain.
Meanwhile, a section of market observers and lawmakers are pushing for investigations into whether confidential policy decisions were somehow reflected in bets before they were public. There have been a number of unusually well-timed trades that raised suspicions recently. In January, a gambler made nearly half a million dollars on the capture of Venezuelan president Nicolás Maduro just before it was officially announced. It is not clear who had made the bet, as the anonymous account had a blockchain identifier of letters and numbers.
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Traders also reportedly made big profits on Polymarket contracts predicting a U.S. strike on Iran hours before it happened. Anonymous wallets made as much as $1.2 million, raising suspicion of insider knowledge.
In March, huge oil futures positions were placed ahead of a White House announcement. Nearly $500-$830 million in Brent and WTI crude oil futures changed hands just before President Trump’s public message about a pause in planned Iran strikes. There was a sharp drop in oil prices following this, which made the pre-announcement bets highly profitable, raising suspicion. Some newly created accounts continued to make highly accurate predictions regarding the war through March.
Early on in April, some traders placed about $950 million in oil futures bets anticipating a market move, just hours before a two-week ceasefire between the U.S. and Iran. The ceasefire announcement caused a 15 per cent decrease in oil prices.
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Prediction markets, which host more than $44 billion in trades, have become increasingly popular last year. The predictions can be related to anything — while many of them are on sports, users can also place bets on other current events. Bets on conflicts have fueled debates over how the industry should be regulated.
This week, U.S. Congressman Ritchie Torres, a Democrat who sits on the House Financial Services Committee, sent a letter to the Commodity Futures Trading Commission that called for an investigation into “suspicious” trades. In March, Democrat leaders introduced legislation that would ban betting on war or military matters.
“Corruption and exploitation are thriving right now within the gaps and loopholes of prediction markets,” said U.S. Senator Andy Kim from New Jersey. “This manipulation leaves the select few winning big, at the expense of working Americans,” he added.