Donald Trump has put a teleprompter operator on unpaid administrative leave and said it is a “disgrace” that he wagered on what the President would say in his speeches.
Gabriel Perez allegedly placed bets at Kalshi on at least 12 different Trump speeches over a three-month period, according to CFTC investigators.
As the teleprompter operator, Perez had access to the script before Trump made the speech, making it easy for him to know exactly what the President would mention.
ABC News reported that Perez made over $100,000 from the wagers. At times, he backed out of trades as Trump skipped over parts of the script.
“I go off teleprompter about 80% of the time,” Trump said during remarks in January to the Detroit Economic Club, one of the speeches under investigation.
Over $10M Wagered On Latest Speech
Despite the scandal, Kalshi continued to offer users the chance to wager on what Trump would say in his Speech to the Nation last night. The market attracted over $10 million in trades, with words including fraud, China, and transgender all getting a mention.
In total, over $910 million has been traded on mention markets this year, prediction market commentator Dustin Gouker revealed while reporting on the Trump scandal. He noted this is more than the platform’s election markets.
Gouker was critical of having these kinds of markets, which he said are “ripe for manipulation and insider trading.”
Kalshi Trader Also Hijacked Trump Speech
It is not the first time Kalshi’s markets on Trump’s speeches have come under scrutiny. In December last year, a Kalshi trader boasted online about manipulating what the President would say in a speech in Pennsylvania.
There is no public evidence that the trader was charged by the CFTC, banned by Kalshi, or otherwise sanctioned over the incident.
As Kalshi attracts more users, primarily through its sports markets, mention markets are also gaining more attention. The speech in December had around $900,000 in volume, less than 10% of last night’s.
“Kalshi would very much like volume on everything else to grow, so it’s not likely to abandon a category that has proven it has some staying power,” said Gouker.tIn another example of how easily these markets can be manipulated, Coinbase CEO Brian Armstrong listed off a series of words in a Kalshi market at the end of the company’s earnings call in November.
Coinbase has joined forces with Kalshi as part of the Coalition for Prediction Markets, which claims it is dedicated to fighting insider trading.
Kalshi Flagged Trades To CFTC
Kalshi’s Head of Enforcement, Robert J. Denault, posted on X that the company had flagged the Trump teleprompter’s trades and assisted the CFTC in its investigation.
The CFTC has not publicly commented on the scandal, but ABC News reported that the regulator has expressed a willingness to settle with Perez. According to sources, Perez may merely have to give back his profits and refrain from making similar trades.
That would appear to be a considerably less severe punishment than others accused of insider trading. A Google engineer is facing up to 50 years in prison after using internal information to wager on Google search results at Polymarket.
White House & Companies Banning Insider Trading
In March, the White House issued an internal memo warning staff against using nonpublic information to place bets on prediction markets.
“The White House has strict ethics guidelines that we expect all staffers and officials to follow,” said White House spokesperson Davis Ingle in response to the Perez scandal.
Kalshi recently announced it would begin asking users to verify their employment to combat insider trading. Last week, major US banks also told their employees they risk termination if they make finance- and politics-related prediction market trades.
Gouker argues that the existence of the markets is creating a needless threat.
“Like a lot of cases we have seen, the inside information only has real value in the context of prediction markets!” he wrote.
