finance
States Issue Bans on Insider Trading by Government Employees on Prediction Markets
Governors in New York, Illinois, and California have signed executive orders prohibiting state employees from using non-public information to trade on prediction markets. These measures emphasize existing laws against insider trading, amid growing concerns over platforms like Kalshi and Polymarket.
Apr 22, 1:57 PM·3m read2 sources
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The order, viewed by WIRED, underscores a commitment to enforcing existing laws against insider trading. Illinois Governor JB Pritzker issued a similar order on April 21, 2026, prohibiting state workers from leveraging confidential government data for bets on these markets, according to a report from @unusual_whales.
California Governor Gavin Newsom signed an analogous executive order last month, banning employees in that state from insider trading on prediction markets. These actions follow a wave of initiatives to address ethical concerns in the industry, which allows wagering on outcomes of events like elections or economic indicators.
The orders clarify how existing regulations, including the Commodity Exchange Act, apply to these platforms.
The White House recently warned executive branch staff against trading on prediction markets, pointing to prohibitions on gambling activities, though it did not clarify if such participation constitutes gambling. Congress has introduced bills to curb market manipulation and corruption, including measures barring elected officials from participating.
Some politicians have discouraged or banned their staff from buying event contracts on these platforms. No known instances of insider trading by state employees prompted the New York order, according to New York State Executive Chamber deputy communications director Sean Butler.
Similarly, enforcement details for the Illinois order were not specified, but it took effect immediately upon signing. The measures address potential corruption akin to insider trading in traditional financial markets.
