White House staff told not to place bets on prediction markets
Comments
jeffwask
nevi-me
Reminds me of our President (SA) asking his colleagues to sign a pledge not to do corruption; when there's already a swearing in that does the same thing.
OutOfHere
For those who live in the red-pilled real world, just don't trade on something where controlling insiders (also with a potential conflict-of-interest) can beat you at the game. This is different from bets with non-controlling insiders with no conflict-of-interest.
scoofy
“Please don’t gamble except for entertainment purposes.”
– Las Vegas
maerF0x0
Isn't that nearly everything public?
OutOfHere
The key is avoiding the bets with controlling insiders, i.e. those that could have a potential conflict of interest. Even something as banal as weather data has some insider knowledge, but an insider has no practical control over it, i.e. the insider is non-controlling, with no conflict-of-interest.
chrisnight
Weather data in prediction markets can definitely be gamed. One example that exists in real prediction markets is that the contract specifies a single source as the source of truth. But that source rounds data during unit conversion twice (F -> C -> F), meaning there’s an unequal probability distribution, and some numbers have a 0% chance of winning.
penguin_booze
You missed the fine print at the bottom: "lolz".
keviniam
I don't understand why anybody without access to serious inside information is currently betting on prediction markets. It's clear that insiders are absolutely going to eat your lunch. So who are the suckers who are losing all this money?
I guess this isn't true for all things you might bet on, but it seems to be true for a lot of them.
mchusma
I did a bit for fun and felt there were areas where I did do well. However, the problems with these markets is the contracts are often such where you can win or lose on obscure technicalities. I bet on 5 things, and 4 were resolved in ways I felt were non obvious.
For example, will the Ayatollah be out by April. Lost because death apparently did not count. Bet Anthropic would advertise at the superbowl. Lost because while they did so they advertised Claude not for the company.
Once it became clear that it was an exercise in legalese, I was done.
nslsm
Wow, those examples are crazy. It’s basically fraud.
seanalltogether
I remember reading something awhile ago in regards to why people were investing in NFTs when it seemed so clear they were a scam. The gist of it was that it's easy to get into cryptocurrency, but it's hard to get out. KYC, taxes, age requirements, currency fees, etc are enough of a barrier that many people would rather just keep those assets in virtual space. Polymarket is the answer to the question "Well what else am I gonna do with this crypto I own"
OutOfHere
That's complete nonsense for the simple reason that it is possible to pay just fine with crypto on various sites, also to buy major gift cards. No KYC applies to these actions. We are not living in 2016.
specproc
I don't know how much of an issue KYC is to your average crypto-dabbler.
I found a few K's worth of BTC down the back of the sofa recently, and was astounded by how easy it was to use it like Visa after converting to stablecoin.
I don't think prediction markets are a function of stranded crypto, because for most holders, crypto has never been more fungible.
Maticslot
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tyjen
There's no shortage of people willing to make extremely poor financial decisions on games of chance, it's why gambling was heavily regulated. Visit a casino and witness addiction in-person, it's a sad sight.
skippyboxedhero
It is either not being offered in depth by anyone market-maker (part of the answer given the relatively small revenue opportunity) or it is being offered by people who aren't sophisticated enough.
Bookmakers offer markets on events where someone can know the outcome. The difference is that they have tools to prevent adverse selection.
Prediction markets offer none of those protections so the market structure is going to end up being very different (which is already happening, revenue opportunity from politics isn't huge). There are other examples of this around latency arb, market is going to be very different.
Also, I will point out that most insiders are probably going to be losing money too. All that you ever read is the final outcome, you don't read the stuff that happens before. Politics is, generally, not a good market because the actual event is driven by decisions made by people. Election markets are fine but political event markets are not good, even if you have inside information.
ceejayoz
> So who are the suckers who are losing all this money?
Random people who saw an ad or their favorite influencer shilling it.
Like when my neighbors started asking me about NFTs.
mrguyorama
There does seem to be a distinct class of "Serial Bagholders" though. People who thought NFTs were going to be their "Ticket" and lost a lot, and then the next thing was going to be their "Ticket", etc etc.
I genuinely don't understand how they have money to keep losing.
ceejayoz
They don't. They're just gambling addicts.
simonw
The ads for prediction markets on TikTok are aggressive - like (paraphrasing) "this is your new source of passive income and you'd be crazy to miss it" aggressive.
tdeck
So basically the standard online scam script for 20+ years but in a TikTok. I remember seeing AdWords text ads in the 2000s for "make $$$ working from home".
sneed-oil
I guess I'm one of those suckers, except that so far I've made a 3x return on the small sum I bet, I would say it's a hedge. I’ve been betting on the Iran war since mid February, the reasoning was that if the conflict happened, my payout would offset some of the jump in my cost of living. I could have used traditional financial instruments to buy options or oil futures or gold, but there's more friction there and I already had some crypto.
_DeadFred_
Ah yes, the war futures exchange keeping us able to afford food.
Somehow 2026 took the Ancient Rome model of profit from destruction and enshitified and made it even worse and more grotesque. WTF are we even doing?
JKCalhoun
Kind of what I was thinking. If it is essentially InsidrBetz.com why bet at all? This is the kind of thing that could (should, anyway) kill the industry.
WarmWash
You believe you are betting on the side of the insiders.
Everyone knows the Casino has the edge, but people still play heavily anyway.
jack_pp
Arrogance / hubris. Some people even if they know it's rigged will believe they know which side the insiders are on
bregma
> So who are the suckers who are losing all this money?
Gambling is just a tax on the stupid. Is it surprising it's rampant in certain institutions?
finghin
Prediction markets are ridiculously diverse so it’s quite a stretch to say that imo.
lmkg
My personal conspiracy theory is that in some cases, the "loser" is in on the graft to. It's a way to launder bribes.
duped
People go to casinos despite knowing the house has the edge in games. Gambling is addictive.
vanviegen
Yes, but you also know exactly how large that edge is. And it's relatively small.
ceejayoz
I suspect most casual gamblers don't know that.
mothballed
Hedging is one rational reason.
raincole
The same goes for stock market too.
"But we have laws criminalizing insider trading..." the only proper response to this is: hahahaha.
113
Whew! Glad that's sorted.
twelvedogs
Only the top guys are allowed to do insider trading! You guys are making it very very slightly more obvious!!
ahartmetz
Does that include friends and cousins? Asking for a friend or cousin.
bcjdjsndon
When you elect a bunch of TV wannabes to run your country this is what happens.
josefresco
Investor highlights for each platform:
Kalshi: Sequoia Capital, Paradigm, Andreessen Horowitz (a16z), Y Combinator, Charles Schwab, Henry Kravis (KKR), and CapitalG (Alphabet).
Polymarket: Intercontinental Exchange (ICE - parent of the NYSE), Founders Fund (Peter Thiel), Vitalik Buterin, and 1789 Capital (Donald Trump Jr.).
PredictIt: Primarily supported by Aristotle International (a political tech firm) and historically Victoria University of Wellington.
Donald Trump Jr.: Prominent investor in Polymarket through his firm, 1789 Capital, and serves as a paid strategic advisor to Kalshi.
The current CFTC Chairman, Michael Selig, created a 35-member panel to draft new regulations for prediction markets. This panel includes the CEOs of the platforms they regulate, such as Shayne Coplan (Polymarket) and Tarek Mansour (Kalshi).
tdeck
These companies were blatant about operating illegally in the US. I remember being shocked to see the live billboard polymarket ads in Philadelphia on the eve of the election. I guess there are too many scandals these days for this to stand out.
exabrial
While we’re at it, how about all Congress?
coldpie
There is currently a bill proposed to do that (for stocks, not prediction market betting, but eh it's a start): https://www.govtrack.us/congress/bills/119/hr5106
It currently has 99 Democratic sponsors and 31 Republican sponsors (note: there are more Republicans than Democrats in the House). It will probably not make it out of committee. 2 of the 4 Democrats on the committee have sponsored it; 0 of the 8 Republicans have.
adabyron
You need to apply it to staff as well and also the judicial branch and all of their staff. Then to all of their family as well.
The way I understand insider trading is usually prosecuted is you find out who made the bet & then you have to track down their communications to see if they got tipped off.
dylan604
I'm sure every POTUS has at one point thought it would be great if they could dictate what congress does
ajross
Reasons to treat these situations differently:
1. The executive is doing very obvious insider trading, you can point at exact trades and bets that are clearly being made based on inside info. That's very different than the statistical arguments made about congressional portfolios.
2. Congress isn't privy to the same kind of inside info. Congress will know about changes in government spending with a few weeks to a month or so of lead time. The executive insiders were timing trades down, literally, to the minutes before the start of military action.
Basically that's a terrible whataboutist game you're playing.
steveBK123
And how about friends & family without official roles, congressional appointment process approvals, etc who just.. happen to be around a lot and involved in a lot of stuff?
p-o
I'm sure it's a preventive measure and no one placed bets to enrich themselves in the last 12 months...
qsera
I think the proper thing to do would be to forbid these markets to make bets on stuff that can be won by using only insider information.
namenotrequired
Like the stock market?
diab0lic
I realize yours is the hip and edgy take but plenty of people have made a lot of money in the stock market without using material non public information.
qsera
Mmm..yea. But stock market is not something new, and this possibility always existed.
So I was only thinking about Poloymarket and stuff like that.
mechoblast
Surely half millions on prediction markets is pennies compared to what is getting made on oil futures/stocks.
Tangurena2
It is easier for the SEC to investigate futures, stocks & options. Some of the prediction/gambling markets use crypto and do not participate in "Know Your Customer" regulations.
skippyboxedhero
It is far easier in crypto. It is much more difficult in futures...as the case of a recent repeat Presidential candidate showed.
That will change when people realise crypto isn't anonymous...but that day isn't today.
bregma
Step 1: Gut the SEC
Step 2: Buy $100,000,000 in oil futures 15 minutes before bombing starts
Step 3: ???
Step 4: PROFIT!!!derwiki
They’re doing money transmission and they’re not doing KYC? Is that illegal or “really frowned upon”?
enoint
You’d think so, but these types of people are afraid of stocks or options and find prediction websites easier to use.
rf15
Honestly not that big a difference here. Both can be loosely interpreted as gambling, especially with the same rough upsides (money without production or consumption!) downsides (addiction, critical existence failure of all your savings) and the corruption and perverse incentives they invite.
qsort
insane they needed to be told
feverzsj
Isn't that in the law?
daveguy
It is in SEC regulated markets like NYSE and NASDAQ. But prediction markets are grifty garbage. Insider trading laws only apply to regulated markets.
Just about anything to do with crypto is sketchy. I don't know why anyone still messes with it. Maybe they just like propping up Iran's oil tolls, ransomware perps, and shovelling money to Dumpty and his merry band of grifters?
cyanydeez
If it were in the law, which part of the justice system do you think would be:
1. Capable
2. Desirous of
3. Competently followed
polyterative
Only they can make the money.
ramon156
Naughty! Anyway
MikeNotThePope
“Do as I say, not as I do.”
mcs5280
*unless they give the big guy a 50% cut
josefritzishere
It is trully pathetic that this needs to be said.
RankingMember
If there's one positive that can be made of this admin, it's the realization that all the things that we thought went without saying ("don't profit from the office", "don't insider trade", "don't casually leak confidential information to our enemies") need much stronger enforcement mechanisms.
hydrogen7800
Too much of our government requires/required its trustees to act in good faith. Clearly that was too vulnerable. And I realize it sounds naive to think that past trustees were acting in good faith, but there are relative degrees of that.
bregma
They didn't go without saying: there are laws on the books explicitly making them illegal. But a law that is not enforced is not justice, and a law that is unevenly enforced is an injustice.
DesiLurker
its free for all at the moment. its not like any of these rule were ever enforced before, lots of our govt worked on honor system & DJT exploited the heck out of it all.
asHqt14
It is understandable that they require coaching on this issue when betting markets are being deregulated and Trump Jr. is invested in Polymarket.
Havoc
It’s laughable that it’s even necessary to tell them.
Hey don’t abuse privileged workplace information for personal gain isn’t exactly a fresh notion.
Imagine if professionals like lawyers and accountants operated like that.
tdeck
Consider the kind of people who would staff this white house.
whywhywhywhy
It's bipartisan, just look at Pelosi's portfolio.
baggachipz
Ah, there's the whataboutism. Where are her bets in the prediction markets?
throwaway613746
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MyHonestOpinon
Aside from the current horrible admnistracion. If I understand correctly, One of the strengths of prediction markets is to try to get the insiders to come in and provide insider information thus improving the total info available.
dwaltrip
One of the weaknesses is incentivizing people to do horrible things, if that makes their bet a wining one.
qsera
It also incentivize people to follow the events and remember stuff so that they are better equipped to make predictions.
I think it incentivize people to use their head and may be even select better leaders.
Please don't do insider trading. Thank you for your attention to this matter.