The Context 158: 🎰 Gambling on Trump

The Trump administration has paved the way for the unprecedented proliferation of so-called “prediction markets” that enable you to effectively gamble on a variety of different outcomes.

These markets are now “regulated” by the underfunded and understaffed Commodities and Future Trading Commission, a regulator that is poorly equipped to regulate consumer-facing products.

On these platforms you can “invest” in a variety of different binary options. For example, perhaps you’re interested in predicting “How many Gold Cards will Trump issue before May?”

The Trump Gold Card, for those blissfully unaware, is a proposal by Donald Trump to allow people to pay $1 million (originally $5 million), which, according to its website, is “a visa based upon an individual’s ability to provide a substantial benefit to the United States.”

The evidence that “the individual will substantially benefit the United States” is the “$1 million gift.”

You can gamble on how many of these will be distributed, despite the fact that critics have the program have highlighted that this wasn’t authorized by Congress, and the president likely doesn’t have the power to make this kind of change.

Maybe instead you want to gamble on whether or not Trump can blatantly flout the Constitution and run for a third presidential term, something which again is illegal.

Perhaps you’d prefer to gamble on whether or not Trump will invoke the Insurrection Act and use the United States military against Americans, likely killing more than his administration already has. There’s a market for that as well.

But perhaps the most objectionable of these markets are the ones where individuals associated with these platforms can change the outcome.

Specifically, there exist a variety of markets where you can gamble on whether or not Trump will pardon certain individuals.

Recently, Trump pardoned Changpeng Zhao, the founder of Binance.

When this pardon turned out to be controversial, Trump decided to insist that he didn’t know who this man he pardoned was.

The Context 125: How to make millions from deal that does not involve you

Despite this claim, Trump has financially benefited from financial deals that involved Binance.

As part of his insistence he made clear that he “was told that [Zhao] was a victim” and added that “my sons are involved in crypto much more than me.”

This certainly leaves open the possibility that Trump’s perspective on the cryptocurrency industry, and which pardons are appropriate, could be influenced by his sons.

ANALYSIS: Eric and Donald Trump Jr. are cashing in on crypto

So in theory, if Donald Trump Jr. were to advocate on behalf of Sam Bankman-Fried, he could probably reasonably increase the chances that Bankman-Fried would get that pardon.

Junior would then be meaningfully affecting the outcomes of prediction markets related to that.

This becomes especially egregious when you remember that Junior invested in Polymarket via his venture capital firm, 1789 Capital.

Additionally, Junior is an advisor to Polymarket.

Furthermore, he’s an advisor to Kalshi.

It used to be a norm that venture capitalists would invest in only a single firm in a niche, rather than investing in firms that compete against their investments.

Junior is a new breed of capitalist who’s presumably giving valuable strategic advice to a firm that’s competing directly with his investment while having connections that enable him to, “hypothetically,” influence outcomes on those very same platforms.

Perhaps, you’d contend that a pardon would be too obvious, that it would draw undesirable attention to the administration, and that it would highlight the kleptocratic governance of this crypto-fascistic administration.

But pardons aren’t the only markets; there are others where you could maintain a higher degree of plausible deniability.

For example, there’s a market for whether or not Trump will say “Tariff King” in February, a phrase that it would be reasonably easy to introduce to the president.

The president has already been willing to share anti-democratic images of himself photoshopped or AI-generated to look like a king, so it would be easy enough to make one of those images, print it out, share it with the president, and tell him that people are calling him the “Tariff King.”

Trump, in his general tendency to act as a parrot, repeating whatever depraved thing was said to him in his last meeting, will likely repeat that phrase at some point, and suddenly you’ve won that market.

Maduro Polymarket bet raises insider trading concerns

Perhaps you have such strong faith in this administration and its ethical guardrails that you feel like none of these things could ever happen. Sure, the president’s son is personally profiting from the deregulatory regime of his father, but that’s as far as the ethical violations will go.

Yet, there have already been accusations of insider trading on Trump administration activities like the kidnapping of Nicolás Maduro, with bets being placed shortly before the operation.

Even the markets related to the Nobel Peace Prize saw unusual trading activity in the lead-up to the announcement.

Broadly and fundamentally, these markets have enabled kleptocrats to take advantage of political power to enrich themselves, a truly and deeply objectionable activity.

— Bennett Tomlin