Washington Edition: Fighting over prediction markets

I’m Jonathan Tamari, senior Washington reporter for Bloomberg Government, and each weekday I’ll be coming to you with inside-the-room reporting and insights that reveal what’s really happening in Washington—and how it impacts you. Email me with feedback and comments here. If this newsletter was forwarded to you sign up here.

Today: The fight over prediction markets, oil prices hit wartime high, and why one phrase stalled DHS funding.

Uneven Bets

Like many developments in tech, prediction markets are often sold on the idea of leveling the playing field.

They harness the wisdom of crowds, one argument goes, and give everybody a chance to make money without traditional sportsbooks profiting off losing bets.

But examples of insiders seemingly once again winning big have drawn scrutiny from both parties—and set off a clash over who’s in charge.

The federal Commodity Futures Trading Commission suggests it has jurisdiction, while lawsuits in at least a dozen states are challenging the platforms and members of Congress have drafted restrictions.

Calls for regulation are growing amid a few high-profile instances of people cheating their way to paydays, and the suspicion there’s more than we can see.

Several bills introduced in Congress would limit trading on the markets. The White House and some state governments have called for workers not to misuse inside information. A number of unusual — and lucrative — bets placed before the U.S. attacked Iran in February raised concerns about people improperly leveraging sensitive information, Emily Nicolle reported.

Last week, prosecutors charged an Army special forces soldier with using classified material to bet on the ouster of former Venezuelan President Nicolás Maduro and make $400,000 (he’s pleaded not guilty).

The case came a day after Kalshi reported that three political candidates in the US had bet on their own races.

“The whole world unfortunately has become somewhat of a casino,” President Donald Trump said. “I don’t like it conceptually, but it is what it is.”

The administration has generally been supportive of prediction markets (Donald Trump Jr. is an adviser to both Polymarket and Kalshi).

There’s some evidence the markets mostly benefit a select few at the expense of many.

Most traders on Polymarket (69%) lost money since 2022 while the top 1% won three-quarters of the profit.

For their part, the platforms say they’re working to catch bad actors. They have also upped their lobbying in Washington.

While everyone scrambles, it looks like another instance — joining AI and social media — of policy-makers playing catch up to innovations far down the tracks.

“We can’t leave it to the regulators to run after the explosion of trading volume,” Kalshi’s head of enforcement, Robert DeNault, told Bloomberg Television.

Technology moves faster than the law.

That’s an easy bet.

Top News

Trump will be briefed today on options for new military strikes in Iran, Axios reported, though earlier the president told the outlet he saw his blockade of the Strait of Hormuz as “somewhat more effective.”

Brent oil reached its highest price since 2022 before dipping again this morning.

The White House has come out against Anthropic’s plan to give its advanced AI model Mythos to 70 companies and organizations. The Wall Street Journal reported US officials worry about a drain on the firm’s computing power.

The House advanced a $70 billion plan to fund ICE and Border Patrol through the end of Trump’s term. The move opens the door to approving additional funding for the rest of the Department of Homeland Security.

Photographer: Graeme Sloan/Bloomberg

Here’s why one small piece of ultra-technical language is stalling a bill to finally fund most of DHS amid its lengthy shutdown. GOP leaders indicated they will make a decision today on how to restore funding for the department.

Election year pressure will make it hard for Congress to pass this year’s appropriations bills, especially with the cuts House Republicans are pushing. “The incentives are not to get agreement,” one Hill veteran told Zach C. Cohen.

The House advanced its plan to extend authority for a key surveillance tool after multiple failures. It still has to get through the Senate ahead of a midnight expiration.

Trump floated a possible troop drawdown in Germany after the country’s leader said the US is being “humiliated” by Iran during on-and-off talks.

Watch This

Go Deeper With BGOV

The Supreme Court’s decision voiding Louisiana’s congressional map and curbing the use of race in drawing US House district lines has major ramifications for redistricting heading into 2028.

Meanwhile, Florida Gov. Ron DeSantis clinched a key victory with his state legislature advancing an electoral map that could net the GOP up to four more House seats. Republicans want more buffer before November.

On Today’s Agenda

The personal consumption expenditures index for March, the Fed’s preferred inflation gauge, and gross domestic product for the first quarter are set to be released this morning

Defense Secretary Pete Hegseth and Joint Chiefs Chairman Dan Caine return to the Hill for a Senate hearing

VA Secretary Doug Collins also testifies in the upper chamber

Air Force Secretary Troy Meink and other officials appear in the House

Trump and the first lady will participate in a farewell for King Charles III and Queen Camilla later this morning

More From Bloomberg

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