The video of White House Press Secretary Caroline Rice abruptly ending the briefing spread just before a critical betting time, fueling concerns about insider trading in prediction markets. This incident occurred amid calls from 30 Democratic lawmakers to introduce legislation banning political betting by politicians.
At first, it seemed like a joke, but no one laughed.
30 seconds exit
The controversy began when Rebekah Rice, the White House press secretary, concluded her daily briefing in approximately 64 minutes and 30 seconds, just before the 65-minute betting window set by the prediction market Kalshi. At that time, the market showed a 98% probability that the briefing would exceed 65 minutes. Traders who bet against this expectation earned up to 50 times their investment within seconds.
X influencer PredictionMarketTrader posted the video, and it quickly became a topic of widespread discussion. Critics accused the White House of manipulating the market. Democratic strategist Mike Nellis wrote, 'We are living in the dumbest era imaginable,' and some have called for a complete ban on prediction markets.
However, the original poster later added, 'You know, this is clearly not insider trading. The amount traded on the market was only $3,000.' PredictionMarketTrader wrote on January 10. Kalshi also explained that the total trading volume was $3,400, with a maximum bet of only $186, stating that claims of insider trading were 'unfounded.'
The real trigger... betting on Maduro's arrest
The briefing video controversy ended as a fiasco, but it intensified concerns stemming from far more serious cases. One Polymarket account bet on Venezuelan President Nicolรกs Maduro being ousted by the end of this month, and earned $400,000 when the U.S. military recently arrested him on drug trafficking charges.
This bet led to immediate legislative action. On January 10, Congresswoman Ritchie Torres (D-NY) introduced the 'Public Accountability for Financial Prediction Markets Act of 2026' alongside 30 Democratic colleagues, including former Speaker Nancy Pelosi.
'Imagine a Trump administration official betting on events like the ousting of Nicolรกs Maduro. If an insider in government also participates in prediction markets, they could be tempted to influence policy for personal financial gain. The pursuit of private interests in prediction markets by government insiders must be strictly prohibited.' โ Congresswoman Ritchie Torres
This bill prohibits federal elected officials, political appointees, executive branch employees, and congressional aides from betting on government policies, government actions, or political outcomes using non-public, sensitive information.
Pelosi's irony
Former Speaker Pelosi is ironically involved as a co-sponsor of the bill, given that her husband, Paul Pelosi, has been under scrutiny for stock trading profits far exceeding those of the market. Since entering Congress in 1987, the Pelosis' investment return has reached approximately 16,930%, compared to the Dow Jones Index's 2,300% rise over the same period.
Such suspicions have even spawned a separate industry. The X account 'Nancy Pelosi Stock Tracker' has over 1.3 million followers. Over $1 billion is managed through automated investing via fintech startup AutoPilot, which replicates her husband's stock trades in real time. Even an ETF with the ticker 'NANC' exists.
In July 2024, Paul Pelosi sold shares worth $5 million. Two months later, the Department of Justice filed an antitrust lawsuit against the company. In 2022, he sold Google stock a month in advance, followed shortly by an antitrust lawsuitโsimilar patterns have been observed.
Pelosi's office has consistently stated, 'I do not own any stocks' and 'I have never been involved, either before or after, in my husband's trades.' When asked about the 2021 congressional stock trading ban, they responded, 'We live in a free-market economy. They should be allowed to participate too.'
Industry implications
Prediction markets such as Polymarket and Kalshi are experiencing a surge in popularity as the 2024 election cycle approaches. They are often used as a payment method for cryptocurrencies. This recent briefing incident, though small in scale, exposed structural vulnerabilities allowing bets on events directly controlled by specific individuals. Such mechanisms inherently carry manipulation risks.
It is uncertain whether Republicans will support the Democratic bill. The office of Representative Torres stated that the bill calls for 'full participation from all members.' Given that Donald Trump Jr., son of former President Trump, is reported to have invested millions in Polymarket, bipartisan agreement may be difficult to achieve.
The prediction market industry is currently facing its first serious regulatory challenge, triggered by a tweet that was so realistic it seemed indistinguishable from realityโso convincing that everyone believed it.