White House Warns Staff Against Using Nonpublic Info for Prediction Market Bets

The White House has quietly reminded its staff that using nonpublic government information to bet on prediction markets is both unethical and potentially criminal, sending an internal email last month as questions mounted over suspiciously timed trades tied to President Donald Trump's decisions on Iran. The March 24 message from the White House Management Office, first reported by The Wall Street Journal and confirmed by multiple outlets, arrived one day after Trump announced a five-day pause on threatened strikes against Iranian power plants and energy infrastructure. It explicitly cited "recent press reports" raising concerns about officials wagering on platforms such as Polymarket and Kalshi.

The timing is notable. In the minutes before Trump's announcement on March 23, more than 50 new accounts appeared on Polymarket, according to reporting by The Independent. Three of those accounts collectively earned more than $600,000 by correctly forecasting the precise timing of the ceasefire. The episode follows a similar pattern from January, when an anonymous trader on Polymarket netted nearly $500,000 by betting on the imminent capture of Venezuelan President Nicolás Maduro, an operation involving U.S. forces. Those bets, placed through cryptocurrency wallets that are difficult to trace, have fueled bipartisan suspicions that someone with access to sensitive deliberations may have cashed in.

Prediction markets have surged in popularity since the 2024 election, allowing participants to trade contracts on everything from Federal Reserve rate decisions to the outcomes of military conflicts. Proponents describe them as information aggregators rather than gambling, but they operate in a regulatory gray area outside traditional securities or gambling laws. Kalshi and Polymarket have both seen trading volumes spike around high-stakes geopolitical events, including the recent U.S.-Israeli actions against Iran. The platforms' anonymity, combined with their use of blockchain, makes it nearly impossible to determine whether winning traders had any connection to the administration.

The White House email, obtained by CBS News, is blunt. It states that misusing nonpublic information for personal financial benefit violates ethics rules and can constitute a criminal offense. All federal employees, it reminds recipients, are bound by guidelines prohibiting such conduct. White House spokesman Davis Ingle pushed back against the implications in statements to multiple outlets, insisting that any suggestion of administration involvement lacks evidence and amounts to "baseless and irresponsible reporting." He reiterated Trump's public stance that officials should not profit from inside knowledge, while emphasizing that the president's only special interest is the well-being of the American people.

Yet the concerns extend beyond staffers. Democratic lawmakers have grown increasingly vocal about possible insider activity as markets reacted in real time to Trump's Iran policy shifts. On the morning of Trump's Truth Social post announcing the pause, trading in oil futures exploded. Bloomberg reported that contracts covering at least six million barrels of crude were sold in a two-minute window, far exceeding recent averages. Critics have pointed to what traders have dubbed the "TACO" trade, Trump Always Chickens Out, in which the president appears to soften aggressive rhetoric when markets turn sharply against him. The pattern has raised questions about whether pronouncements are being calibrated with an eye toward financial impacts rather than purely strategic ones.

The story also intersects with the Trump family's business interests. Donald Trump Jr. serves as an adviser to both Kalshi and Polymarket. Last year, the family's social media company announced plans to launch its own prediction market service. While no evidence has emerged directly linking the family to the suspicious trades, the connections have amplified calls for stricter oversight. Senators Adam Schiff, a California Democrat, and John Curtis, a Utah Republican, introduced legislation this week that would ban members of Congress and other officials from trading on prediction markets, building on existing restrictions for stocks.

The episode highlights deeper tensions in how the modern information economy collides with governance. Prediction markets can, in theory, surface collective wisdom about future events, but when those events involve imminent military decisions or diplomatic breakthroughs, the incentives for leakage grow. Government ethics rules were written for an earlier era of financial disclosure. They do not explicitly bar officials from betting on these platforms, even as the sums involved have grown large enough to attract sophisticated actors. The administration's email warning represents an attempt to reinforce existing norms without conceding that any breach has occurred.

Public trust in institutions has already been strained by years of partisan warfare over everything from stock trading by lawmakers to the revolving door between government and industry. This latest chapter, unfolding against the backdrop of a volatile conflict with Iran, adds another layer. If even the appearance of impropriety cannot be avoided, the pressure for clearer rules will only intensify. Congressional investigators from both parties have begun asking questions, though the anonymous and decentralized nature of the platforms complicates any probe.

For now, the White House maintains that the email was simply a prudent reminder amid external scrutiny. Yet the sequence of events, profitable anonymous accounts materializing at pivotal moments, record oil trades preceding presidential announcements, and the industry's growing entanglement with political figures, suggests the underlying issues will not fade quickly. As prediction markets mature from niche curiosity to influential force in how the public and policymakers anticipate crises, the challenge of preserving confidentiality within the executive branch becomes more acute. Whether the current rules are sufficient, or whether new guardrails are required, is likely to become a central debate in the months ahead.