The mention market
According to sources speaking to NPR, Trump aide Gabriel Perez bet on something called a “mention market.” This is a section of Kalshi where you can sink money into contracts on crucial questions such as “What will Domino’s say during their next earnings call?” (Currently, $26,000 has been invested in this question; the smart money thinks that “Parmesan” and “DomOS” are more likely to be mentioned than not.)
Kalshi contracts include words that Domino’s might say.
In the case of Perez, his “forecasting” allegedly took place over several months at the end of last year and the beginning of this year, and his contracts were sometimes adjusted in the middle of Trump speeches. According to ABC:
Sources say Perez typically has the final eyes on nearly all of the president’s prepared remarks—and is often known to take last-minute edits from Trump himself… In certain instances, investigators uncovered times when Perez would back out of certain bets mid-speech when Trump skipped over a portion of the speech that included a word he had previously bet would be mentioned, the sources said.
This conjures up an amazing mental image: The teleprompter operator for one of the world’s most powerful people tapping away at his phone during a Trump speech to ensure he made more money for himself.
In this case, Kalshi (which bans this sort of activity) flagged unusual activity, investigated, and found the customer was a federal employee. It then froze his funds and sent the information to the CFTC, which is said to have investigated and to be in settlement talks with Perez.
Will Perez actually be prosecuted? Apparently not; as ABC notes, “sources said the CFTC alerted federal prosecutors in Manhattan, who declined to open a criminal investigation.”
The White House did say today that Perez “will no longer be working at the White House.”
Always be closing gambling
Whatever you want to call it, “predicting the future with money at stake” has become huge business in America. A recent (and terrific) long article by McKay Coppins in The Atlantic showed people what a year of online sports gambling looks like, and it raised serious questions about the negative issues that widespread, legal, bet-from-your-phone gambling might cause in a country where “roughly half of men ages 18 to 49 have an active account with an online sportsbook.”
Prediction markets, which have invested heavily in advertising during the World Cup, are only going to make these challenges more acute as they extend “forecasting” from sports to drug trials, flight cancellations, and the specific words that people will say in speeches.
