Washington's Prediction Market Scandal: Inside Information, Insider Bets

Political prediction markets have exploded into Washington's power corridors, turning nonpublic government knowledge into a lucrative betting edge — and triggering federal investigations, congressional bans, and White House alarm. Polymarket alone saw political betting double to over $4 billion in the first quarter of 2026 compared to the same period in 2025, with election-related wagers exceeding $325 million. The temptation has proven irresistible for staffers, influencers, and at least one lawmaker.

The most concrete case involves Gabriel Perez, a White House teleprompter operator now under Commodity Futures Trading Commission investigation for pocketing over $100,000 by betting on presidential speech content before it was publicly delivered. President Trump was described as furious, and Perez has been placed on unpaid leave. The scandal intensified earlier in the year when three anonymous Polymarket accounts made over $600,000 correctly predicting a U.S.-Iran ceasefire in April — a bet so precisely timed it prompted White House Counsel's Office lawyers to question staff and issue a formal March memo banning use of nonpublic information for financial gain. Blockchain research firm Bubblemaps traced the winnings, but identifying the actual bettors proved impossible due to Polymarket's anonymous account structure.

Two previously unreported bets tied to the 2024 vice presidential selection are also drawing scrutiny. At a members-only Tampa club, Rep. Anna Paulina Luna of Florida allegedly told associates she knew Trump would pick JD Vance — and claimed she had passed that tip to MAGA influencer Rogan O'Handley (known as "DC Draino") so he could place a winning Polymarket bet. Luna denied any foreknowledge, calling the suggestion she was "telepathic" absurd. O'Handley denied receiving or trading on insider information. The CFTC is investigating the allegation regardless.

A third Vance-related bet came from former investment banker Mark Moran, who says he received a tip over dinner at Georgetown cocktail bar L'Annexe from Jake Denton, then a Heritage Foundation researcher. Moran placed a $900 Polymarket bet on Vance, made over $600, and messaged an associate that he had "a kid in the Heritage Foundation who has been leaking this." Denton has since become a White House policy adviser; a White House official insisted his comments weren't based on insider knowledge.

The industry is now courting Congress while regulators close in. Kalshi hosted a lavish beer garden party in June near Nationals Park for the congressional baseball game, running a bar tab past $1,000 within the first hour while congressional staffers mingled with company representatives. The platform has hired a former Senate Republican leadership aide as its head of congressional affairs and registered lobbyist. Meanwhile, the Senate passed a resolution in April banning lawmakers and staff from betting on Polymarket and Kalshi, and the House Oversight Committee has launched its own investigation into suspicious betting tied to U.S. military operations in Iran and Venezuela. The CFTC is requesting information from both platforms, but faces a core legal problem: insider-trading laws were never written with prediction markets in mind.