Legislation is being considered in both houses of Congress to limit or ban government officials from participating in prediction markets. States have moved in this direction as well: Gov. JB Pritzker of Illinois signed an executive order barring state employees from using inside information to trade in prediction markets. New York’s Democratic governor Kathy Hochul also issued a similar order.
Kalshi says that it has millions of users placing weekly bets across 3,500 markets. The platform is regulated by the Commodity Futures Trading Commission, but special problems loom, not the least of which is that the CFTC operates under the auspices of the Trump Administration. There are are Kalshi markets where people can bet on aspects of the Iran war and President Trump’s policy decisions. The temptations for insiders to profit from what they know or have witnessed have to be alluring, and, sadly, public service is not a universe teeming with scruples or restraint.
One throbbing example: Donald Trump Jr. is both an investor in and an unpaid adviser to Polymarket, another prediction betting service, and a paid adviser to Kalshi. Junior is also a director of the Trump family’s social media company, and it is about to launch its own prediction betting platform called Truth Predict.
Can you say “appearance of impropriety”? Sure you can. Why are two competitors in the same field allowing someone to advise both of them as he prepares to launch a third competitor? It’s a rhetorical question: Don Jr. has influence with his father, of course.
Ann Skeet, the senior director of leadership ethics at the Markkula Center for Applied Ethics, opines that “it’s problematic to have the president’s son in the mix” because he could be among a small group of people who actually know the answers to specific White House questions that people are betting on. Ya think?
Traders are publicly anonymous. One trader cleaned up by betting $34,000 against very long odds that Maduro would be captured by the U.S. in Venezuela. He or she reportedly used a new crypto account and wagered most of the funds just hours before news of Maduro being snatched and taken out of his country.
Hmmmm…
Kalshi’s website states that people who have inside information or who can influence the outcome of an event are prohibited from betting on it, but enforcement is another matter. Mark Moran, the Virginia candidate fined by Kalshi, claims that he bet and allowed himself to be caught to bring attention to a practice he called “dangerous to our democracy.”
He will also soon by trying to sell the Brooklyn Bridge…
Seldom have a I seen a more inviting target for the sarcastic comment, “Oh yeah, this will turn out well.”
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Ethics Alarms 
The DOJ just charged a member of the military with predicting the take down of Maduro and he was part of the operation.