White House Warns Staff Against Using Insider Information on Prediction Markets

The White House issued a directive on March 24, advising staff not to use non-public information to place bets on prediction markets such as Kalshi and Polymarket. This guidance came a day after President Donald Trump announced a five-day pause on planned attacks against Iranian energy infrastructure. The email highlighted concerns about government officials potentially leveraging confidential information for personal financial gain.

White House spokesman Davis Ingle emphasized that all federal employees are bound by ethics guidelines prohibiting the use of insider information for financial benefit. He stated, "The only special interest that will ever guide President Trump is the best interest of the American people."

The advisory follows reports of unusual trading activities. Notably, in January, a Polymarket user reportedly earned $400,000 by betting on the capture of Venezuela's former leader, Nicolás Maduro, just before the event was publicly announced. The anonymity of the account raised questions about the possible use of insider information.

Prediction markets, which have seen significant growth, now host over $44 billion in trades. While many bets pertain to sports, users also wager on political events and economic indicators. The increasing popularity of these platforms has intensified discussions about the need for regulatory oversight to prevent potential abuses.

In response to these concerns, bipartisan legislation has been introduced to prohibit federal officials from using insider information on prediction markets. Senators Todd Young (R-Ind.) and Elissa Slotkin (D-Mich.) co-sponsored the Public Integrity in Financial Prediction Markets Act of 2026, aiming to close loopholes that could allow for such activities.

Additionally, the Commodity Futures Trading Commission (CFTC) has reiterated its commitment to enforcing insider trading laws within prediction markets. CFTC Enforcement Director David Miller stated, "Unfortunately there's a myth in mainstream media and social media that insider trading law doesn't apply in the prediction markets. That is wrong."