Hey Insiders: Don’t Look a Grift Horse in the Mouth

Hey Insiders: Don’t Look a Grift Horse in the Mouth

Nothing like being on all sides of an issue, but Donald Trump is against regulation in most any business model, even to the point of trying to ban states from regulating AI, so the feds can create the mildest of the mild, AI-lite “guardrails” that really stop nothing. Crypto was a “scam” according to Trump’s earliest description, but since scams are Trump’s long suite, soon he discovered a way, with a little official recognition by the feds, to make billions for himself and his family with old sorts of crypto/bitcoin games. But with online prediction games, you can bet on almost anything… and billions of trading dollars suggest that millions of Americans do.

But what sets this new format apart is the ability to vote for evil and against your country… and more importantly: so much winning seems to be based on obvious insider knowledge. So, what’s Trump take on this new justified insider trading game? As Alexander Osipovich and Krystal Hur, writing for the April 25th Wall Street Journal, put it: “‘The whole world, unfortunately, has become somewhat of a casino,’ Trump told reporters. ‘Every place they’re doing these betting things, I was never much in favor of it. I don’t like it conceptually. But it is what it is.’

“A tougher government stance on prediction markets represents a collision between the Trump administration’s policies and his family’s business interests…Trump’s oldest son, Donald Trump Jr., is an adviser to both Polymarket and its chief rival, Kalshi. He is also a partner at a venture-capital firm that owns a stake in Polymarket. The president’s media business, Trump Media & Technology Group, has announced plans to get into prediction-market betting on sports and elections.” Donald seems to be organically attracted to scams; a genetic predisposition that seem to capture the hearts, minds and wallets of his equally scam-prone children.

“Polymarket’s unregulated offshore platform, which has long had an edgy, anything-goes culture. The platform uses cryptocurrencies to settle bets… Unlike on U.S.-registered prediction markets, the offshore platform’s users don’t have to provide ID to set up accounts, helping keep them anonymous. Its blockchain-based technology, however, allows amateur sleuths to spot suspicious trading activity.” WSJ. Which gives rise to an insider-betting case impacting one of our surprise military operations: the US Special Forces capture of former Venezuelan strongman Nicolás Maduro. It seems that one of those soldiers, master sergeant with the U.S. Army Special Forces, Gannon Ken Van Dyke, predicted (and bet) that capture immediately before it happened, earning a cool $400K. Van Dyke was arrested and “charged with using classified information to place lucrative bets on Polymarket [which] is a watershed moment for prediction markets, heralding a new era of stricter government enforcement of the wildly popular betting platforms.” WSJ

But to play in the predictive marketplace ,where so many have unique knowledge is a fool’s game… unless the bettor is an insider. Well… In the stock market world, using knowledge not available to the general public to trade or hedge shares is a crime. Martha Stewart got her street cred when she did time in a federal penitentiary for precisely the crime of insider trading. And sure, if you use classified information to win bets, you are facing serious time. But is there a more general insider trading rule in these predictive gambling sites? Maybe… or maybe not.

“Van Dyke’s arrest signals that U.S. authorities won’t ignore allegations of egregious behavior on the platforms, even as the Trump administration has otherwise taken a largely laissez-faire approach to prediction markets.

“Alongside the criminal case, a regulatory agency that oversees prediction markets filed a civil lawsuit against Van Dyke for insider trading. The Commodity Futures Trading Commission [CFTC] suit suggests that the agency thinks it can go after bad actors on Polymarket, even though the platform isn’t registered with the agency and is legally domiciled in Panama.” WSJ But in a world where government regulation is heavily definitionally driven, will a federal regulatory schema aimed at pork bellies, crop futures and bets on expected the price of oil or gold commodities apply to insiders in predictive gambling? Does the CFTC have jurisdiction over the new scam… er… market? The CFTC thinks it can regulate these new insider scammers, when the President and his family are so directly involved?

I mean with Trump’s “Grifter-in-Chief” status, watching his eldest son walk the Trump walk in predictive scamming… er… I mean predictive wagering, Mister Deregulation just might instruct his GOP sheep in Congress to kill any regulatory initiative in committee, so that such bill would never reach the House floor. But dangers of letting folks bet on anything – from death and injury to prediction in our theater of war – seems particularly unsavory… even for Trump… or is it?

I’m Peter Dekom, and it just may be a point of pride for DJT to watch DJT, Jr walk in his footsteps, but is there ever going to be a line drawn somewhere against this grift at the top, something to make the horde of bad men stop…or is America doomed to be the poster nation for kleptocracy?