White House staff were recently told not to engage in prediction market contract trades.
Key Takeaways
- White House Management Office email told aids that it’s a “criminal offense” to use insider information to profit from Kalshi and Polymarket.
- The warning was sent on March 24.
- Concerns about the use of nonpublic information profiting have been raised during the Iran War.
An email was sent to White House aides on March 24, according to a CBS News report, advising that it’s a “criminal offense” for them to use insider information to trade on prediction market sites like Kalshi and Polymarket, or to help others profit.
Enjoying Covers content? Add us as a preferred source on your Google account“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,” the White House Management Office email, obtained by CBS News, stated. “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.”
Raising awareness
The warning comes after multiple reports of prediction market users with little to no account histories suddenly profiting from contracts centered around the Iran War. Federal prosecutors began investigating insider information in relation to prediction markets last month.
Federal lawmakers have also introduced a bill that would prohibit public officials, including the President and members of Congress, from using nonpublic information to trade contracts. Crackdown efforts have taken off since a prediction market user made more than $400,000 from the U.S. capturing Venezuelan president Nicolas Maduro.
Polymarket recently introduced rule changes to help halt insider information trading, while Kalshi has stated that it doesn’t permit it either.
Legal challenges
Prediction market news has also centered around lawsuits and court battles between trading exchanges and states. Arizona was recently sued by the Commodity Futures Trading Commission, which regulates prediction markets.
Kalshi filed a motion that would’ve kept the state from seeking criminal charges against the operator for offering sports contracts in a legal sports betting state, but it was denied by a federal judge. The CFTC has challenged the ruling.
