The White House has told staff not to use non-public information to place bets on prediction markets, a warning that lands squarely in the middle of a fast-growing corner of finance now drawing scrutiny for possible leaks and political trading. The caution followed President Donald Trump’s five-day pause on threats to strike Iranian power plants and energy infrastructure, and it underscores how quickly geopolitical headlines can turn into a wagering opportunity.
Prediction markets such as Kalshi and Polymarket have exploded in size, with more than $44bn in trades flowing through platforms that let users bet on everything from central-bank moves to election results. That popularity has also made them a magnet for controversy. Polymarket faced questions in January after a gambler appeared to make nearly half a million dollars on the capture of Venezuelan President Nicolás Maduro just before it was officially announced, a trade that raised fresh doubts about whether sensitive information had slipped into the market.
The pressure is now moving from chatter to regulation. Democrat Ritchie Torres has asked the Commodity Futures Trading Commission to investigate “suspicious” trades, while Senate Democrats have proposed a flat ban on prediction-market betting tied to war or military action. The fault line is clear: platforms want the liquidity and attention that come with high-stakes geopolitical events, but the more those events move prices, the harder it becomes to argue these are just novelty bets rather than a venue where privileged information can pay off fast.
