Trump teleprompter aide made $100,000 betting on what Trump would say, reports say - Ars Technica

Overview

Trump teleprompter aide made $100,000 betting on what Trump would say, reports sayvar abtest_2163498 = new ABTest(2163498, 'click');

Kalshi is a high-tech prediction market that allows people to “forecast the future” (their term). It is about contracts and information, the company says, making its offerings more like a soybean futures contract than a round of blackjack or a pull on the one-armed bandit.

Details

Still, prediction markets look a lot like betting if you squint, which is why states like New York have tried to regulate them under gambling laws. To head this off, Kalshi has sought federal protection under the Commodity Futures Trading Commission (CFTC). Yes, this means regulation for Kalshi, but it also means the CFTC will sue states like Kentucky, Minnesota, Illinois, and Rhode Island, trying to pre-empt their laws in favor of a single national standard that the CFTC controls.

While this battle plays out, government insiders continue to generate insider trading stories after using their work knowledge to place bets “forecast the future” and make huge sums of money. The classic example, of course, was Gannon Ken Van Dyke, a US soldier who participated in planning the capture of Venezuela’s Nicolas Maduro and then made $410,000 from that knowledge on the prediction site Polymarket. Van Dyke was arrested in April.

But there are also more ridiculous stories, such as disgraced former Congressman George Santos, who allegedly talked up his upcoming appearance at the State of the Union, secretly bet on whether he would attend, and then didn’t go at the last minute to score a payout.

This activity raises questions, like: How many people are gambling forecasting the future based on government secrets or insider knowledge? How many are actively manipulating results they have bet on? Even the Trump White House was concerned enough to issue a memo in March telling employees not to “use nonpublic information to buy or sell these contracts.”

But concerns have lingered, especially after major wins on contracts involving US government policy or actions. Such suspicions will not be helped by new allegations today from multiple outlets that insider trading on Kalshi has extended even to President Trump’s teleprompter operator, who allegedly made $100,000 “forecasting” specific words and phrases that might appear in Trump speeches.

According to sources speaking to NPR, Trump aide Gabriel Perez bet on something called a “mention market.” This is a section of Kalshi where you can sink money into contracts on crucial questions such as “What will Domino’s say during their next earnings call?” (Currently, $26,000 has been invested in this question; the smart money thinks that “Parmesan” and “Dom OS” are more likely to be mentioned than not.)

Kalshi contracts include words that Domino’s might say.

In the case of Perez, his “forecasting” allegedly took place over several months at the end of last year and the beginning of this year, and his contracts were sometimes adjusted in the middle of Trump speeches. According to ABC:

Sources say Perez typically has the final eyes on nearly all of the president’s prepared remarks—and is often known to take last-minute edits from Trump himself… In certain instances, investigators uncovered times when Perez would back out of certain bets mid-speech when Trump skipped over a portion of the speech that included a word he had previously bet would be mentioned, the sources said.

Sources say Perez typically has the final eyes on nearly all of the president’s prepared remarks—and is often known to take last-minute edits from Trump himself… In certain instances, investigators uncovered times when Perez would back out of certain bets mid-speech when Trump skipped over a portion of the speech that included a word he had previously bet would be mentioned, the sources said.

This conjures up an amazing mental image: the teleprompter operator for one of the world’s most powerful people tapping away at his phone during a Trump speech to ensure he made more money for himself.

In this case, Kalshi (which bans this sort of activity) flagged unusual activity, investigated, and found the customer was a federal employee. It then froze his funds and sent the information to CFTC, which is said to have investigated and to be in settlement talks with Perez.

Will Perez actually be prosecuted? Apparently not; as ABC notes, “sources said the CFTC alerted federal prosecutors in Manhattan, who declined to open a criminal investigation.”

The White House did say today that Perez “will no longer be working at the White House.”

Whatever you want to call it, “predicting the future with money at stake” has become huge business in America. A recent (and terrific) long article by Mc Kay Coppins in The Atlantic showed people what a year of online sports gambling looks like, and it raised serious questions about the negative issues that widespread, legal, bet-from-your-phone gambling might cause in a country where “roughly half of men ages 18 to 49 have an active account with an online sportsbook.”

Prediction markets, which have invested heavily in advertising during the World Cup, are only going to make these challenges more acute as they extend “forecasting” from sports to drug trials, flight cancellations, and the specific words that people will say in speeches.

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Key Takeaways

• Trump teleprompter aide made $100,000 betting on what Trump would say, reports sayvar abtest_2163498 = new ABTest(2163498, 'click');

• Kalshi is a high-tech prediction market that allows people to “forecast the future” (their term)

• Still, prediction markets look a lot like betting if you squint, which is why states like New York have tried to regulate them under gambling laws

• While this battle plays out, government insiders continue to generate insider trading stories after using their work knowledge to place bets “forecast the future” and make huge sums of money

• But there are also more ridiculous stories, such as disgraced former Congressman George Santos, who allegedly talked up his upcoming appearance at the State of the Union, secretly bet on whether he would attend, and then didn’t go at the last minute to score a payout