Gabriel Perez, a White House teleprompter operator accused of using advance access to President Trump's speeches for Kalshi prediction market bets, has left the federal government while a regulatory investigation continues. According to the Associated Press, citing a White House official who spoke on condition of anonymity, Perez "no longer works in the federal government." The official declined to say whether Perez resigned or was dismissed. White House Press Secretary Karoline Leavitt described the allegations as "deeply unfortunate and, frankly, a disgrace," adding that President Trump had been informed about the matter. Perez had worked on Trump's speeches since the 2016 presidential campaign, giving him access to prepared remarks before they were delivered publicly.
Senators Lisa Murkowski (R-AK) and Brian Schatz (D-HI) are urging the Commodity Futures Trading Commission (CFTC) to conduct formal government-to-government consultation with Tribal Nations before moving forward with a proposed rule governing prediction markets. In a letter sent to the CFTC, the senators asked the agency to immediately extend the public comment period for its proposed "Prediction Markets; Public Interest Determinations" rule by at least 60 days. The current public comment period is scheduled to close on July 27, 2026, which the senators argue does not provide enough time for Tribal Nations to fully review the proposal or engage with the commission through the required government-to-government consultation process.
The trading activity came to light after Kalshi's internal surveillance systems identified unusual transactions connected to its event contracts. Following the ABC News report, Kalshi's head of enforcement and legal affairs, Robert DeNault, said the exchange's surveillance team had quickly flagged the trades, opened an internal review and referred the matter to the CFTC, which oversees federally regulated prediction markets. Kalshi's rules prohibit users from trading on information obtained through their employment or other nonpublic sources. According to ABC News, the company froze most of Perez's reported profits after identifying the activity and referred the case to federal regulators. Although federal prosecutors declined to open a criminal investigation, the CFTC continues examining whether Perez used confidential information when placing event-contract trades. Perez has acknowledged making some of the trades and has been cooperating with the regulator's inquiry.
Three California tribes - Blue Lake Rancheria, Chicken Ranch Rancheria, and Picayune Rancheria - have filed a lawsuit against Kalshi in California federal court, arguing that the prediction market platform's sports event contracts constitute unlicensed Class III gaming on tribal lands under the Indian Gaming Regulatory Act (IGRA). According to reports from The Third Sovereign, the tribes' legal theory centers on location-based jurisdiction, contending that when users access the platform while physically on reservations, Kalshi is conducting gambling without proper tribal authorization, compacts, or regulatory approvals required under federal law. In Ho-Chunk Nation v. Kalshi Inc., Ho-Chunk alleges that Kalshi's sports event contracts are functionally indistinguishable from sports betting and therefore constitute unlawful Class III gaming when offered to individuals located on Tribal lands without Tribal authorization.
The Ninth Circuit Court of Appeals heard oral arguments on July 12, 2026, with the panel appearing considerably less friendly to Kalshi than the district court. According to The Third Sovereign, one judge stated directly that the contracts sound like bets subject to Native American gambling laws, while another suggested it would not be unreasonable to exclude tribes from federal oversight. The panel questioned Kalshi's counsel on why the contracts are not simply bets, with the underlying district court case currently stayed pending the appellate decision. The case represents a significant challenge to the prediction market industry's regulatory framework, with more than sixty federally recognized tribes filing amicus briefs across related proceedings. A Brookings analysis describes the sector as an existential threat to Indian gaming, while California tribes have reaffirmed plans for a 2028 ballot initiative for tribally led sports betting in response to prediction markets operating in what they characterize as a regulatory gray area.
The Perez investigation has added to a series of recent enforcement actions involving prediction markets and alleged misuse of privileged information. In June, the Department of Justice and the CFTC opened an investigation into former U.S. Representative George Santos after Kalshi detected suspicious trading tied to a contract on whether Santos would attend Trump's February State of the Union address. According to NPR, Kalshi froze Santos' account and referred the activity to regulators after reviewing the trades. Earlier this year, Kalshi also suspended three federal election candidates after an internal review found they had traded contracts tied to their own races. Attention from regulators has increased as authorities examine whether existing insider trading laws apply to event-based contracts. In April, federal prosecutors charged a U.S. Army Special Forces soldier with using advance knowledge connected to an operation targeting former Venezuelan President Nicolás Maduro to place profitable bets on Polymarket contracts. Congress has also examined the issue, with House Oversight and Government Reform Committee Chairman James Comer launching an inquiry into insider trading safeguards at Kalshi and Polymarket.
