Prediction Market Insiders Made Millions While Regulators Slept
(SeaPRwire) –
Washington just exposed what Silicon Valley quietly knew all along. Prediction markets were supposed to aggregate wisdom. Instead they became the fastest casino for people who read presidential speeches before anyone else did.
Two Democratic senators sent a letter Monday to White House counsel Will Scharf asking exactly what safeguards exist to stop staff from treating confidential briefings like trading edges. The deadline for answers is November 23. The catalyst came four months ago. Gabriel Perez, President Trump’s longtime teleprompter operator, reportedly made over $100,000 on Kalshi by betting on which words Trump would drop in more than a dozen speeches. He reached a CFTC settlement requiring surrender of profits, a penalty, and a three-year trading ban. In April, federal prosecutors charged a U.S. soldier with using classified information to make more than $400,000 on Polymarket bets tied to the capture of Venezuelan leader Nicolás Maduro. In February, six newly created Polymarket accounts earned roughly $1 million combining profits from bets on a U.S. strike against Iran before the month ended.
The timing is deliberate. Democrats are expected to retake Congress in January. Senator Elizabeth Warren is poised to chair the Senate Banking Committee. She now has a committee seat with subpoena power to drill into financial firms and potential conflicts involving the president’s family businesses. Representative Ro Khanna introduced legislation Tuesday calling for a ban on sports prediction markets, arguing they amount to sports betting dressed up as financial trading. The White House did not immediately respond to requests for comment.
While investigators ask uncomfortable questions, the Trump family has built deeper roots inside the prediction market industry. Donald Trump Jr. advises both Kalshi and Polymarket. His firm 1789 Capital, where he serves as partner, has invested in Polymarket. Trump Media, parent company of Truth Social and in which the president holds a stake through a trust, announced plans in October 2025 for a prediction market service called Truth Predict paired with Crypto.com. The offering was later scaled back to a marketing partnership rather than a standalone platform.
The structural problem is obvious. White House staffers process classified intelligence daily. Speechwriters know policy shifts hours ahead of announcements. Teleprompter operators control exact phrasing before it reaches airwaves. Those advantages transfer instantly to prediction market positions when platforms allow users to bet on governmental outcomes with no transparency requirements.
Regulatory gaps will close eventually. The CFTC already moved against Perez. Military justice pursued the soldier. With Democrats gaining committee leverage, pressure will intensify through hearings and compliance mandates, not voluntary restraint. The administration cannot rely on silence when investigative infrastructure is about to flip sides.