White House Warns Staff on Prediction Market Bets Amid Iran Tensions

The White House sent a staff-wide email last month cautioning employees against using nonpublic information to place bets on prediction markets or trade related financial contracts, an action that arrived amid a wave of unusually well-timed wagers tied to President Donald Trump's handling of the conflict with Iran. The March 24 message, first reported by The Wall Street Journal and confirmed by multiple administration officials to CBS News and other outlets, represents an effort to reinforce ethics rules even as questions mount about whether insider knowledge has leaked into rapidly growing betting platforms.

The email from the White House Management Office explicitly referenced recent news coverage of government officials potentially wagering on platforms such as Polymarket and Kalshi. It reminded recipients that misusing nonpublic information for financial gain is a criminal offense and violates federal ethics regulations. "All White House employees are reminded that the misuse of nonpublic information by government employees for financial benefit is a very serious offense," the message stated, according to copies obtained by CBS News.

The timing is notable. The warning went out one day after Trump announced a five-day pause in strikes on Iranian energy infrastructure, citing what he called productive conversations with Tehran. That announcement, posted to Truth Social shortly after 7 a.m. on March 23, was preceded by a burst of activity in oil futures markets. Bloomberg reported that contracts covering at least six million barrels of Brent and West Texas Intermediate crude were traded in a two-minute window starting at 6:49 a.m., far above the recent average volume. Oil prices fell sharply afterward. Separate data cited by Reuters showed an unidentified trader or group placed roughly $500 million in bets on crude futures in a single minute before the pause was made public.

On prediction markets, the pattern has been even more striking. More than 50 new Polymarket accounts were created in the minutes before the ceasefire announcement, according to reporting by The Wall Street Journal. Three of those accounts earned more than $600,000 by correctly forecasting the timing of Trump's decision. Polymarket trades are conducted in cryptocurrency, making them difficult to trace to specific individuals. The episode echoes an earlier incident in January when an anonymous trader netted nearly $500,000 on Polymarket by betting on the imminent capture of Venezuelan leader Nicolás Maduro, an operation in which U.S. forces were involved.

White House officials have pushed back forcefully against suggestions of impropriety. Spokesman Davis Ingle told multiple outlets that any implication of misconduct by administration officials is "baseless and irresponsible" without concrete evidence. "President Trump has been crystal clear," Ingle said in a statement. "While he seeks a strong and profitable stock market for everyone, members of Congress and other government officials should be prohibited from using nonpublic information for financial benefit." Ingle also noted that all federal employees are bound by ethics guidelines that bar such activity.

Still, the episode has intensified scrutiny of how information flows inside the Trump administration and whether the president's frequent public statements about policy and markets are shaping, or being shaped by, financial incentives. Traders have coined the term TACO for what they see as a pattern: Trump Always Chickens Out when equity or oil markets slide in response to his threats. Critics, including some Democratic lawmakers, argue the administration's approach blurs the line between governance and market manipulation. 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.

The rise of these platforms has complicated traditional notions of insider trading. Unlike conventional stock markets, Polymarket and Kalshi operate in a regulatory gray area, arguing that their contracts more closely resemble investments in outcomes than sports gambling. Trading volumes have exploded, particularly around elections, geopolitical crises, and Federal Reserve decisions. Yet the anonymity afforded by cryptocurrency and the speed with which information can move from government circles to trading apps have alarmed ethics watchdogs.

This is not the first time the Trump family has intersected with the industry. Donald Trump Jr. serves as an adviser to both Kalshi and Polymarket, and the family's social media company, Trump Media, announced plans last year to launch its own prediction market service. The White House has not addressed those connections directly in its statements on the recent warning.

For now, the email appears intended to draw a clear line for staff even as broader debates continue about how to regulate these markets. Prediction platforms have defended themselves by noting that suspicious accounts represent a tiny fraction of overall volume and that they cooperate with law enforcement when asked. But the string of coincidences, from Maduro to the Iran pause, has left lawmakers and regulators wrestling with a larger question: in an era when policy announcements can move markets in seconds and when betting on those outcomes has become as accessible as buying stocks, how does government maintain public confidence that decisions are being made in the national interest rather than to benefit a few well-placed bettors?

The White House insists the warning reflects the president's commitment to ethical standards. Yet the persistence of these episodes, coupled with the difficulty of tracing cryptocurrency trades, suggests the tension between rapid information flows, political decision-making, and lightly regulated markets will remain a feature of this administration's tenure.