The White House administration last month warned staff against using insider information to place bets on prediction markets, according to an email sent to employees on March 24. The warning came just one day after US President Donald Trump announced a five-day pause on his threat to attack Iranian power plants and energy infrastructure, highlighting the sensitive timing of such market activities.
The email referenced press reports raising concerns about government officials potentially using non-public information on platforms like Kalshi or 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," while emphasizing that all federal employees are subject to ethics guidelines prohibiting insider trading.
Polymarket faced scrutiny in January when a gambler made nearly half a million dollars betting on the capture of Venezuelan president Nicolás Maduro just before it was officially announced. The anonymous account, identified only by blockchain letters and numbers, raised serious questions about whether the individual benefited from inside knowledge of US military operations, though the identity remains unclear.
Prediction markets, which host over $44 billion in trades, have surged in popularity over the past year, allowing users to bet on everything from sports outcomes to Federal Reserve rate decisions and local election results. However, bets on conflicts have sparked intense debate about regulatory gaps, with critics arguing the industry operates in a legal gray area.
US Congressman Ritchie Torres, a Democrat on the House Financial Services Committee, this week called for an investigation into "suspicious" trades in a letter to the Commodity Futures Trading Commission. In March, Democratic leaders introduced legislation that would completely ban prediction market betting related to war or military action, with Senator Andy Kim warning that "corruption and exploitation are thriving right now within the gaps and loopholes of prediction markets."
Source: www.bbc.com