A $19 Bet on Trump's Surprise Press Secretary Pick Could Pay $1,896 as Kalshi Probes Suspicious Trades

A £14 ($19) punt on a long-shot candidate to be Donald Trump's next White House press secretary is now under scrutiny, after prediction market Kalshi began examining a cluster of correctly placed bets that backed Katie Zacharia at 1 per cent odds just before her appointment was made public.

Prediction market Kalshi is examining a handful of small bets that correctly backed Katie Zacharia as the next White House press secretary before her appointment was made public.

One trader staked £14 ($19) on the low-probability candidate late on Thursday, a position set to return about £1,400 ($1,896). Two further wagers placed on Friday afternoon, shortly before the news broke, stood to pay out about £5,690 ($7,712) combined.

Zacharia had been given roughly a 1 per cent chance of landing the job on the platform before the announcement.

Three Small Bets, Big Potential Payouts

A Kalshi spokeswoman said the company was 'taking a closer look at trades' that predicted Zacharia would replace Karoline Leavitt, The Wall Street Journal reported.

The first bet, of £14 ($19), was placed at around 10.43pm Eastern Time on Thursday 8 October. If it pays out, it will return £1,400 ($1,896), roughly 100 times the stake before fees.

Two more bets followed at 1.41pm Eastern Time on Friday, of about £55 ($74) and £59 ($80). They stood to pay £2,720 ($3,689) and £2,970 ($4,023) respectively. News of Zacharia's appointment broke at around 2pm Eastern Time, less than 20 minutes later.

Before the announcement, Kalshi's market had given Zacharia about a 1 per cent likelihood of being named press secretary, Reuters reported. Kalshi did not comment further on the report to the news agency.

The timing of the bets has prompted scrutiny, but there is no public evidence that the traders used confidential information, and their identities have not been disclosed.

The payouts reflect how Kalshi contracts work. Each winning contract settles at 74p ($1), and prices move with trading activity and traders' collective expectations.

The reported payouts suggest the contracts were bought at around one US cent each, although the exact number of contracts in each trade has not been published.

Who Is Katie Zacharia?

Trump confirmed the appointment on Truth Social on Friday afternoon. 'I am confident that Katie will deliver strong results for our Country as the next White House Press Secretary,' he wrote, adding that she was 'replacing the fabulous Karoline Leavitt, who did a fantastic job as Press Secretary.'

Zacharia is a conservative commentator who has appeared on Fox News, CNN and other outlets. According to her LinkedIn profile, she has worked as a senior communications adviser for Truth Social and its parent company, Trump Media & Technology Group, Newsweek reported.

She also served briefly as a spokesperson for the Department of Homeland Security before leaving in March.

Her 1 per cent rating on Kalshi suggests few traders expected her to get the job.

Leavitt stepped down at the end of August. She cited the demands of the job and her wish to spend more time with her family after the birth of her second child in May. Trump called her 'one of the best White House Press Secretaries in the History of the Office.' Fox News has announced that she will join the network as an on-air contributor from 1 November.

Previous Enforcement Case on Kalshi Trades

The investigation follows a separate, already resolved case involving bets on Trump's own words.

In July, Gabriel Perez, a former White House teleprompter operator, came under investigation over Kalshi trades on markets predicting which words the president would use in speeches. Kalshi's surveillance team flagged the trades and referred them to the Commodity Futures Trading Commission (CFTC).

On 28 August, the CFTC announced an order requiring Perez to repay about £79,000 ($107,539) in profits and pay a £48,000 ($65,000) civil penalty, and banning him from trading for three years, The Block reported.

Perez had reportedly bet on Kalshi's 'Mentions' markets, which let users wager on whether particular words or phrases will be spoken in a public address, including Trump's State of the Union speech in February and his appearance at the World Economic Forum in Davos.

The CFTC found that he used advance access to presidential speeches to trade, breaching his duty of trust and confidence. Perez agreed to the order, which is a civil regulatory settlement rather than a criminal conviction.

Leavitt, then press secretary, announced that Perez had been placed on unpaid administrative leave. At the time, Trump called the matter 'deeply unfortunate and frankly a disgrace'. Kalshi bars users from trading on confidential information obtained through their work.

Prediction Markets Under Scrutiny

Prediction markets allow users to buy contracts on the outcome of real-world events, from elections and sports to personnel decisions. Kalshi is regulated by the CFTC as a designated contract market.

The rapid growth of such platforms has brought increasing scrutiny of traders who may profit from inside information, according to Reuters.

The individual stakes were small, but the potential payouts were large relative to the amounts wagered, and two of the three wagers were placed less than 20 minutes before the news became public. The Perez case does not establish that the Zacharia traders had access to inside information or broke any rules.

Kalshi has not publicly said how long its review will take or whether it will refer the trades to the CFTC, as it did in the Perez case.