Investigation launched into shady bets on new White House press secretary Katie Zacharia: Report

WASHINGTON, DC: Kalshi, the prediction market platform, is looking into a run of oddly timed bets that anticipated President Donald Trump’s decision to make Katie Zacharia the next White House press secretary. News broke of the bets on Friday, Oct 9.

The bets were placed shortly before media outlets announced Zacharia’s appointment, potentially earning the lucky traders thousands of dollars. The suspicious timing has drawn attention from regulators and watchdogs, raising fresh questions about whether some traders gain access to news before it becomes public. The industry faces growing scrutiny as investigators examine such trading patterns.

Small bets placed shortly before announcement

According to The Wall Street Journal, which was cited by the New York Post, at least three bets on Zacharia securing the high-profile White House role were placed shortly before the news emerged.

The Journal scoured publicly available Kalshi data to find a $19 bet placed around 10:43 pm Thursday. That stood to net the bettor $1,896.  

A Kalshi spokeswoman declined to talk about the bets on the White House press secretary, telling The Post, “We can’t comment on ongoing investigations.”

Recent months have seen several shady trades on Kalshi and rival Polymarket, which are facing a mountain of litigation from state authorities.

Two more bets, one for $74, the other for $80, showed up around 1:41 pm on Friday. If those wagers hit, they’d bring in about $7,712 combined, according to the report.

What really caught everyone’s eye was the timing.

The bets predicted Zacharia’s pick before any news outlets said a word about it. Still, nobody knows who placed them, or if they had an insider tip. There’s no proof, at least in the current reporting, that the bettors had access to any confidential information.

Prediction markets face growing scrutiny

Zacharia, who’s known for his conservative commentary and time as a spokesperson for Homeland Security, landed a high-profile communications job just as the Trump administration looked to shake up its White House press team.

This investigation gets at a big problem with prediction markets: people trade contracts based on how political, economic, and other real-life events play out. That means any edge, especially inside knowledge, can tip the scales.

Authorities began looking into Zacharia’s wagers while, at the same time, platforms like Kalshi and Polymarket came under fire. Both companies have run into legal trouble in various states over how they operate.

Earlier this year, a totally separate issue came up. A US special forces soldier got charged after he allegedly used classified intel about a mission to capture Venezuelan President Nicolás Maduro to rake in more than $400,000 by betting on Polymarket.

That case set off alarm bells. People started worrying about traders using sensitive government information to turn a quick profit, especially since the stakes are high when money, politics, and military action mix.

In prediction markets, the fallout from a single piece of information can mean serious cash for those with access.