Former White House Operator Fined $172,000 Over Speech Predictions

A former White House teleprompter operator has found out the hard way that insider dealing on prediction markets doesn’t pay.

Gabriel Perez has been ordered to pay over $172,000 for making trades on Kalshi while working as a teleprompter operator at the White House.

He used prior knowledge of what President Trump would say to buy contracts on so-called “mention markets”. Such insider dealing is unlawful.

Regulator, the CFTC, ordered Perez to surrender profits worth over $107,000. He was also issued a civil penalty of $65,000.

However, the Commodity Futures Trading Commission said the fine had been reduced to Perez’s “exemplary co-operation” during the case.

The CFTC vs Perez: What We Know

In a press release, the CFTC set out the case against Gabriel Perez, namely that he had misappropriated “material, nonpublic information” obtained via his employment.

• Charges were for traded made between December 2025 and February 2026
• Perez traded presidential “mention markets” on words or phrases used by the POTUS
• Kalshi spotted suspicious trading to the CFTC
• Perez received a three-year prediction market trading ban
• The White House had previously warned employees and aides not to trade on prediction markets

Kalshi Sued, Loses in Ninth Circuit Ruling

It’s been a bad week for Kalshi, one of the largest prediction markets on the planet.

Its battle against Connecticut regulators took a turn for the worse when they sued Kalshi for “illegal sports betting” activities.

In a statement, CT Attorney-General William Tong said that prediction markets amount to “online gambling”, singling out Kalshi’s sports event contracts.

Connecticut’s Department of Consumer Protection Gaming Division had already sent cease-and-desist letters to Kalshi and other exchanges.

In another major legal blow to Kalshi, a federal appeals court voted 3–0 that sports event contracts amounted to sports betting. They also ruled that federal CFTC jurisdiction does not stop states like Nevada from taking action on “unregulated” sports betting.

However, Kalshi continues to grab headlines, last week announcing deals with five MLB sides as prediction markets boost their presence in U.S. sports.

Prediction Market Clash Could Swamp the Trumps

Curiously, all three judges who voted for the move were appointed by the president. However, Donald Trump’s son acts as an advisor to both Kalshi and Polymarket.

There’s no suggestion that the administration has been advising insiders to trade on sensitive markets. However, the Perez debacle – as well as high-profile bets made on the timing of Venezuelan president Nicolas Maduro – suggest the White House still has a cleanup to do.

The New York Times reported last week that Donald Trump Jr. had told Republican state attorneys-general in March not to pursue prediction markets in the courts. He chided online gambling companies who, he alleged, were concerned about losing out on their “monopolies”.

Supreme Court Ruling Beckons

Ultimately, the U.S. Supreme Court could decide the future of prediction markets.

The latest defeat in the Ninth Circuit Court of Appeals for Kalshi could well speed up a Supreme Court showdown to decide who regulates prediction market exchanges once and for all.

Courts are delivering different outcomes across different states as regulators tussle with the CFTC for regulatory powers.

CFTC chair Michael Selig argues that prediction markets are its alone to regulate. However, states with hard-fought sports betting laws want the power to regulate and tax Kalshi and others.

The rapid growth in prediction exchanges could lead to the Supreme Court, with some suggesting a June 2027 deadline for an ultimate decision.