Feds Probe ‘Mention Markets’ on Prediction Sites Following Trump Kalshi Teleprompter Scandal

Federal regulators have opened a formal review into “mention markets” across prediction market platforms, examining whether these speculative financial contracts are excessively vulnerable to insider trading and price manipulation, according to two people with direct knowledge of the matter who spoke on the condition of anonymity (as reported by KPBS). The Commodity Futures Trading Commission initiated the inquiry following a high-profile controversy involving presidential speeches and trading activity on Kalshi, the largest prediction market in the United States.

The regulatory scrutiny focuses on niche prediction contracts where participants wager money on specific word choices or phrases uttered by public figures during scheduled appearances, ranging from political addresses to broadcast sports commentary. While prediction markets have gained billions of dollars in trading volume primarily through sports wagers and macroeconomic outcomes, the subset of word-choice contracts has drawn sharp attention from federal overseers regarding how easily insiders might rig outcomes.

“These mention markets are not popular across the political aisle,” a person familiar with internal CFTC deliberations told reporters on the condition of anonymity (via KPBS). “They are potentially very easy to manipulate, so the CFTC is taking a hard look at whether some of them make sense.”

Kalshi Suspends Sports Mention Markets

In response to the mounting federal inquiry, Kalshi has removed all mention markets tied to sporting events until further notice. The platform’s sports-related word contracts allowed bettors to wager on whether sportscasters would utter specific terms such as “MVP,” “ankle,” or “redshirt” during live broadcasts. Although sports betting accounts for more than 80% of the billions of dollars traded weekly on Kalshi, the company continues to permit wagers on statements made during political events, corporate earnings calls, and live television newscasts (according to KPBS coverage).

The marketplace operates under self-certification rules for financial derivatives known as swaps, which require platform operators to affirm that listed markets are not readily susceptible to manipulation. Representatives for both Kalshi and the CFTC declined to comment on the ongoing regulatory review. Meanwhile, Kalshi’s main competitor, Polymarket, offers similar word-choice contracts exclusively through its international platform, which is not regulated by U.S. federal authorities, while omitting them from its smaller U.S. service (as detailed by KPBS).

The White House Teleprompter Investigation

The federal review follows a specific enforcement action involving President Donald Trump’s longtime teleprompter operator, Gabriel Perez. Federal regulators revealed that Perez used Kalshi to profit from correctly wagering on specific words and phrases the president would utter during public appearances. Internal surveillance tools at Kalshi flagged the transactions in March after detecting irregular buying patterns, prompting market makers to raise flags through whistleblower channels (reported CNBC).

Company analysts utilized customer onboarding records to determine that the account holder was a federal government contractor operating teleprompters. Kalshi froze the account, retaining more than $90,000 in alleged profits generated across multiple speeches, including the State of the Union address, a primetime address, a speech at the World Economic Forum in Davos, Switzerland, and a Medal of Honor ceremony (according to CNBC).

White House Press Secretary Karoline Leavitt addressed reporters regarding the incident, confirming that the individual under investigation had been placed on unpaid leave and removed from presidential events. “The president is too. I spoke with him about it. He believes it’s deeply unfortunate and, frankly, a disgrace,” Leavitt told a news conference (as noted by CNBC). “The White House has extremely strict ethical guidelines with respect to issues like this, and as I just told you, this individual will no longer be here.”

Compliance Measures and Industry Impact

Robert DeNault, Kalshi’s head of enforcement, stated that the platform’s compliance team promptly flagged and referred the suspicious trades to the CFTC following an internal exchange investigation. “We have been assisting regulators on this matter and provided evidence we collected, as we do in any referral,” DeNault said (via CNBC).

Kalshi explicitly prohibits insider trading and has implemented stricter compliance requirements throughout 2026. These updates require traders in select markets to submit comprehensive details regarding their employment status to prevent individuals with access to material, nonpublic information from trading on predictive contracts (reported CNBC). Internal divisions have previously surfaced among platform leadership regarding the utility of mention markets, with co-founder Luana Lopes Lara championing word-choice contracts as an avenue to attract diverse retail traders beyond traditional sports wagering, despite ongoing litigation from states and Native American tribes over sports betting categories (according to KPBS).

Federal regulators have not established a formal timeline for concluding their evaluation of mention markets or determining whether additional restrictions will be enacted across prediction platforms.