A White House teleprompter operator allegedly used advance knowledge of President Donald Trump's prepared remarks to win more than $100,000 on Kalshi's prediction markets, drawing a federal investigation into the first known case of insider trading on a political betting platform.
The Commodity Futures Trading Commission found that Gabriel Perez, Trump's teleprompter operator since 2016, placed bets on more than a dozen presidential speeches over three months, including the State of the Union address, using nonpublic information about the content of Trump's remarks, according to people familiar with the probe.
"Our surveillance team promptly flagged and referred these trades to the CFTC, and we are cooperating and assisting regulators," Bobby DeNault, Kalshi's lead lawyer, said in a statement.
Perez is in settlement talks with the CFTC that would require him to return his profits and refrain from similar trading, the people said. The bets targeted Kalshi's "Mentions" market, where users wager on whether specific words or topics appear during a public speech. In some instances, investigators found Perez withdrew bets mid-speech when Trump skipped over a portion of the prepared remarks that included a word Perez had wagered on, the people said.
The case marks a critical test for prediction markets, which have exploded in popularity since a federal appeals court cleared the way for event-based contracts last year. Kalshi, the only CFTC-regulated prediction exchange in the US, has positioned itself as a legitimate financial platform — but the alleged insider trading threatens to undermine that standing and invites stricter oversight of a sector Trump himself has said could leave the US "left out in the cold" if not allowed to operate.
Perez sat for an interview with CFTC investigators and acknowledged some of the trades, the people said. The regulator later alerted federal prosecutors in Manhattan, who declined to open a criminal case. The White House issued an internal memo in March warning staff against using nonpublic information to place bets on prediction markets, people previously confirmed.
The CFTC investigation comes as the Department of Justice brings its first two criminal cases involving insider trading on prediction markets. In one, a US special forces soldier allegedly bet on the capture of Venezuelan President Nicolas Maduro. In the other, a Google employee allegedly used internal company data to wager on user search trends. Both pleaded not guilty.
Kalshi has since updated its policies to require users to disclose their place of employment. "If you have information by virtue of your job or your employment, something that you have a legal duty surrounding, and you have an obligation not to take that, misappropriate it for yourself," DeNault told ABC News in May.
The case also raises questions about the regulatory framework governing prediction markets. While the CFTC oversees Kalshi as a designated contract market, state regulators have argued that many of the contracts amount to gambling and fall under state gaming laws. The tension between federal and state oversight remains unresolved, creating uncertainty for platforms seeking to operate in the US.
Perez continues to serve as one of Trump's teleprompter operators, a role that gives him final eyes on nearly all of the president's prepared remarks. He previously came under scrutiny by congressional and federal investigators over edits made to Trump's remarks surrounding the Jan. 6, 2021, attack on the US Capitol.
This article is for informational purposes only and does not constitute investment advice.
