The White House sent a staff-wide email last month cautioning employees against using their positions to place well-timed bets on prediction markets, following a series of suspicious trades tied to the Iran conflict.
The March 24 email from the White House Management Office came a day after President Donald Trump announced a pause on strikes against Iran through a post on Truth Social, according to the Wall Street Journal, which first broke the story on Thursday.
In the roughly 15 minutes before the Iran ceasefire post went public, a wave of unusual activity hit the futures markets – more than $760 million worth of oil futures contracts changed hands in under two minutes, per Dow Jones Market Data.
The trades sparked immediate scrutiny. On prediction platforms like Polymarket and Kalshi, three accounts reportedly pocketed more than $600,000 by correctly calling the timing of this week's Iranian cease-fire. Critics, including several Democratic lawmakers, have suggested the activity points to someone cashing in on advance knowledge of the policy shift.
White House spokesman Davis Ingle confirmed the email, telling the Journal that "the only special interest that will ever guide President Trump is the best interest of the American people." He emphatically rejected any suggestion of wrongdoing inside the administration, calling the implication "baseless and irresponsible reporting."
While there is no evidence that administration officials have used inside information for personal gain, the episode has fueled broader concerns about prediction markets, which allow users to bet – often anonymously – on everything from sports outcomes to geopolitical events. The industry now hosts more than $44 billion in trades, according to reporting by the BBC, and has surged in popularity over the past year.
A report by Northwestern Mutual found a significant cohort of Gen Z and Millennials, feeling financially left behind, have turned to or are considering prediction markets, with 80% seeing speculative investments as a way to reach their goals. Bank of America sounded a cautionary note late last year, arguing the boom in sports gambling and prediction market platforms lends itself to "heightened behavioral risk that could pressure credit quality, increase delinquencies, and impact earnings for issuers and subprime lenders."
The same day the White House issued its warning, both Polymarket and Kalshi announced tighter insider trading rules barring users from acting on stolen confidential information or betting on outcomes they can influence. Such controls are also on the minds of leadership at JPMorgan, which has reportedly has weighing explicit guidelines for its staff that participate in those platforms.
On Capitol Hill, congressional Democrats are pushing for stronger guardrails. Sen. Richard Blumenthal of Connecticut and Sen. Andy Kim of New Jersey introduced a bill that would outright ban prediction market bets related to war or military action. "Corruption and exploitation are thriving right now within the gaps and loopholes of prediction markets," Kim said.
On the House side, Rep. Ritchie Torres of New York sent a letter to Commodity Futures Trading Commission chair Michael Selig and Securities and Exchange Commission chair Paul Atkins calling for an investigation. Torres told CNBC that the pre-announcement trading defied any innocent explanation: "What kind of trader would make a massive trade at 6:49 a.m., 15 minutes before a market-moving presidential announcement with billions of dollars at stake and without a hedge?"
The Iran trades are not an isolated case. In January, an unknown trader on Polymarket netted more than $400,000 by betting on the ouster of Venezuelan President Nicolas Maduro less than five hours before his capture was announced. In February, Israel arrested several people, including army reservists, for allegedly using classified information to place bets on Israeli military operations.
States have also been questioning the legitimacy of prediction markets, with legal challenges suggesting that they should be subject to the same laws and mechanisms of enforcement as gambling platforms. But even as those guidelines and legal challenges continue, at least for the moment, we can expect the high times to continue for apparently in-the-know bettors on prediction markets, which
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