White House News: Democrats Demand Staff Betting Ban
The latest white house news out of Washington turns on a question that would have sounded strange only a few years ago: can a member of the president’s own staff place a bet on the words the president is about to say, and get away with it? Two Democratic senators say the answer has to be no. Senators Elizabeth Warren of Massachusetts and Jeff Merkley of Oregon have written to the White House demanding to know what safeguards exist to stop staff from using confidential information to profit on prediction markets. They want the answers by November 23.
The letter, sent on Monday to White House counsel Will Scharf, follows a scandal that first came to light in July. A longtime White House teleprompter operator, Gabriel Perez, allegedly earned more than $100,000 by betting on the prediction market platform Kalshi on which words President Donald Trump would use in his speeches. Perez had access to drafts of those speeches before they were delivered. He later settled with the Commodity Futures Trading Commission, surrendering his profits, paying a penalty of $173,000, and accepting a three-year trading ban. He also lost his White House job, and he was not criminally prosecuted.
Warren and Merkley say four months have passed since that case became public and the White House has still not shown it has taken meaningful action. Their letter asks whether other White House employees have made comparable bets, whether staff receive training on the rules against trading on nonpublic information, and whether officials contacted the CFTC or the Justice Department about the Perez case. It also asks for a copy of any memo warning staff against such bets. White House spokesman Davis Ingle said federal ethics rules already prohibit employees from using nonpublic information acquired at work to bet on prediction markets, but he did not say whether a review of staff activity was underway. That gap, between rules on paper and evidence of enforcement, is at the centre of the senators’ complaint. The Pentagon and Congress have already moved to crack down. Now the pressure is on the White House to do the same.
The Letter to the White House Counsel
“It has been four months since this White House insider trading scandal came to light, and we write to you to understand what further steps — if any — your office is taking to prevent abuses of power,” Warren and Merkley wrote, according to a copy of the letter shared with Fortune. The phrasing leaves little room for doubt about what the senators think of the administration’s response so far.
The letter asks whether any other employees placed bets using information obtained at work, whether staff are trained on the rules against trading on nonpublic information, whether written guidance has been issued since the Perez case, and whether officials contacted the CFTC or the Justice Department.
The November 23 deadline matters because of what comes after it. Democrats won control of both chambers of Congress in the midterm elections held on November 3, and they take control in January. Warren is expected to become chair of the Senate Banking Committee, a position that would give her subpoena power and a platform to investigate financial firms and potential conflicts involving the president’s family businesses. It was first reported by MS NOW, in a report by Lily Becker and David Rohde.
The Teleprompter Operator Who Bet on the President’s Words
Gabriel Perez worked as the White House teleprompter operator, a job that put him in close proximity to the president’s speeches before they were delivered. According to a July report, Perez allegedly made more than $100,000 on Kalshi by betting on which words Trump would use in more than a dozen speeches. Because he could see drafts of the speeches in advance, he knew what was coming before the rest of the country did.
Prediction markets such as Kalshi offer contracts on highly specific outcomes, including the exact words a public figure will use in a speech. For someone with advance access to a speech text, those contracts are close to a sure thing. The bets were detected by Kalshi’s own internal regulators, and the case was referred to the CFTC, the federal agency that oversees the prediction market industry.
The settlement that followed was substantial: Perez agreed to surrender his profits, pay a penalty of $173,000, and accept a three-year ban from trading. He also lost his job at the White House. He was not, however, criminally prosecuted. Critics say a civil settlement and a job loss are a light consequence for someone who used a position of trust to profit from inside information.
The Pentagon Has Already Acted
While the White House has yet to say what it will do, the Pentagon has moved. On October 20, Defense Secretary Pete Hegseth issued a one-page memorandum titled “Do Not Compromise Military Operations for Personal Financial Gain.” The memo bars all Department of Defense personnel, military and civilian alike, from using nonpublic information in financial transactions, whether directly or through a third party. It covers both classified information and information that is merely not public, and it expressly names Polymarket and Kalshi.
Hegseth’s memo warns that the risks go beyond personal ethics. “Our enemies watch movements in these markets,” he wrote. When an American service member, intelligence professional, or other Defense Department civilian places a bet on a military outcome, the memo argues, the wager itself creates a signal that adversaries can read. A surge of betting could tip off an enemy, and a personal stake could distort the judgment of someone planning an operation. Violators face administrative punishment, disciplinary proceedings, or criminal prosecution under the Uniform Code of Military Justice or federal law.
The directive followed a case that had already shaken the Pentagon. In April, federal prosecutors charged a United States soldier with using classified information to make more than $400,000 on Polymarket bets tied to the capture of Venezuelan leader Nicolás Maduro. The soldier, Master Sergeant Gannon Ken Van Dyke, 38, a member of the Army Special Forces, was charged with five federal offences and pleaded not guilty. His criminal trial is scheduled for early December, and the CFTC filed a parallel civil action, its first insider-trading case involving event contracts. In May, a bipartisan group of House members had asked Hegseth to go further and bar all military and civilian personnel from wagering on any national-security-related topic.
A Wider Pattern of Insider Bets
The Perez and Van Dyke cases are not the only ones to have raised concerns. In February, six newly created Polymarket accounts drew scrutiny after earning roughly $1 million in combined profits by betting that the United States would strike Iran before the month ended. No charges have been publicly reported in connection with those accounts, but the episode fed a growing sense that inside information could be converted into money on prediction markets with unusual ease.
In April, the Senate prohibited its members and staff from using prediction markets, on the same logic as the Pentagon memo: people with access to information the public does not have should not be allowed to trade on it. The House has not yet adopted an equivalent rule, but the pressure is growing.
Other Democrats are pushing for broader restrictions. On Tuesday, Representative Ro Khanna of California called on Congress to ban sports prediction markets, describing them as “sports betting disguised as financial trading.” Senator Catherine Cortez Masto has raised similar concerns. The industry’s defenders say the problem is the small number of people who misuse the markets, not the markets themselves. For the senators, the issue is whether the people closest to power are allowed to profit from them.
The Trump Family’s Ties to the Industry
One reason the Warren-Merkley letter has drawn so much attention is the Trump family’s own involvement in the prediction market business. Donald Trump Jr. advises both Kalshi and Polymarket, the two platforms at the centre of the controversy. The venture firm 1789 Capital, where he is a partner, has invested in Polymarket. Trump Media, the company behind Truth Social, announced plans in October 2025 for a prediction market service called Truth Predict with the crypto exchange Crypto.com, later scaling back the offering to a marketing partnership.
None of that is, by itself, evidence of wrongdoing. Advising a company is not the same as trading on inside information, and the senators do not accuse the president’s son of doing so. But the ties create an appearance problem. The senators argue the White House has failed to act on insider trading in prediction markets while the president and his family stood to profit from the industry’s growth, and that it cannot be trusted to police an industry in which its own family has a stake.
The White House has not directly addressed that argument. Ingle’s statement focused on the existing ethics rules and did not engage with the question of the family’s business ties. The letter, however, makes the connection explicit, and it is likely to be a central theme when Warren takes over the Banking Committee in January. The committee has jurisdiction over financial markets, and its chair has broad powers to hold hearings, demand documents, and compel testimony.
What Happens Next
The immediate test is the November 23 deadline. The senators have asked for answers to a series of specific questions, and for a copy of any memo warning staff against prediction market betting. A full response would shift the debate to whether the safeguards are adequate; a partial response, or none at all, would give the senators fresh material for the hearings expected in the new year.
Democrats take control of Congress in January, and Warren is expected to chair the Senate Banking Committee. Prediction market oversight will be a priority for her as chair, alongside scrutiny of the Trump family’s crypto ventures. The letter to the White House counsel is an early move in that campaign, and it signals that the committee will not wait for the new Congress to be sworn in before it starts asking questions.
There are other moving parts. The trial of Master Sergeant Van Dyke is scheduled for early December, and its outcome will shape how seriously the courts treat prediction market insider trading. In Congress, Khanna’s call for a ban on sports prediction markets may gather support, and the House may yet adopt the Senate’s prohibition on members and staff using the platforms. For the White House, the question is whether it acts before it is forced to. A clear set of rules and a public commitment to enforce them would answer much of the complaint; a refusal would leave the administration facing a Banking Committee chair with subpoena power.
*Source: MS NOW*