The White House has suspended teleprompter operator Gabriel Perez after he allegedly made more than $US100,000 ($AU142,000) by betting on U.S. President Donald Trump’s speeches.
Perez allegedly placed the bets on prediction market Kalshi, which alerted authorities after detecting suspicious activity.
Trump’s press secretary said the President “believes it’s deeply unfortunate and frankly a disgrace.”
Here’s what you need to know.
Background
Kalshi is a prediction market where people can place bets on the outcomes of future events, including politics.
Specifically, users can bet in the “mentions” market, predicting which phrases, topics, and words certain public figures might say.
One popular market allows users to bet on what Trump will say in his speeches.
For example, ahead of his address to the nation on Friday (Australian time), users could bet on its contents.
Allegations
Perez has been employed as a White House teleprompter operator since 2016.
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Trump’s press secretary, Karoline Leavitt addressed the allegations at a press conference on Thursday (local time), saying Kalshi had “notified the Commodity Futures Trading Commission (CFTC) of suspicious activity.”
The CFTC is an independent U.S. regulator overseeing the country’s derivatives markets, including prediction markets such as Kalshi.
The American Broadcasting Company (ABC) reported that Perez allegedly made more than $US100,000 ($AU142,000) by betting on words used in Trump’s speeches.
Leavitt also confirmed Perez had been placed on unpaid administrative leave.
“[Trump] believes it’s deeply unfortunate and frankly a disgrace,” she said.
Leavitt added that the White House has “extremely strict ethical guidelines with respect to issues like this.”
Rules
The CFTC investigates the suspected misuse of confidential information in prediction markets.
Insider trading can include placing bets using confidential information obtained through work or another position of trust.
In the U.S, it can carry fines of up to $US5 million and 20 years in prison. It is also a criminal offence in Australia.
Kalshi monitors trades for suspicious activity and subjects some users, including government officials, to additional screening.
