Campaign Staffers Profit from Betting on Their Own Candidates

Campaign staffers are increasingly using private polling data to place bets on their own candidates through election prediction markets, leading to ethical and legal concerns. One staffer, speaking anonymously, described how they and colleagues would bet on their candidate before the release of favorable polls, resulting in significant profits. The staffer stated, "Because you have all this information and knowledge that isn't publicly available yet, it's almost foolish not to bet on it before it's made public."

This practice has drawn attention from regulatory bodies. Jeff Le Riche, a former trial lawyer at the Commodity Futures Trading Commission (CFTC), noted that such betting "could potentially be a violation" and subject to investigation. He explained that using non-public, material information for personal gain breaches the Commodity Exchange Act. Former CFTC commissioner Kristin Johnson highlighted the commission's lack of experience in handling election-related insider trading cases, emphasizing the need for clear congressional direction.

In response to these developments, some political figures have taken action. Rep. Seth Moulton, D-Mass., banned prediction markets from his House office and campaign, with his campaign manager stating, "When people are in positions of public trust and they use insider information to make, you know, insider bets, that's completely unethical." Additionally, the White House has cautioned staff against using prediction markets, and the Senate unanimously voted to prohibit senators and their staff from engaging in such activities.

Despite these measures, the legal landscape remains unsettled. The CFTC has issued guidance asserting its authority over prediction market regulation, yet challenges persist. For instance, in February, prediction market platform Kalshi suspended and fined users for political insider trading after discovering that candidates had bet on their own campaigns. As prediction markets continue to grow, the need for comprehensive regulation and enforcement becomes increasingly apparent.