New York, Illinois Ban State Workers from Prediction Markets
Governors cite insider trading risks as prediction markets hit record ₱1.42 trillion ($23.6 billion) in monthly trading volume, with recent scandals including a trader profiting ₱24,072,764 ($400,000) on political outcomes.
Key Takeaway
Two states moved to ban insider betting as prediction markets boomed to ₱1.42 trillion ($23.6 billion) monthly volume.
New York Governor Kathy Hochul and Illinois Governor JB Pritzker signed executive orders banning state employees from participating in prediction markets, citing insider trading risks.
Hochul said getting rich by betting on inside information is corruption, plain and simple. Her Wednesday order goes further than most bans — New York state employees can't even help others profit from confidential information through prediction markets. Violators face dismissal and law enforcement action. Illinois signed its order Tuesday, with Pritzker saying the state is doubling down on its commitment to transparent and ethical government by bolstering its current laws to prevent insider trading.
The timing isn't random. Prediction markets hit ₱1.42 trillion ($23.6 billion) in monthly trading volume in March after seven straight months of growth. But the boom brought scandals. A Polymarket trader made ₱24,072,764 ($400,000) betting on Nicolás Maduro's ouster. Kyle Langford, a former Republican turned Democrat running for California's 26th Congressional District, bet ₱12,036 ($200) on his own candidacy on Kalshi before getting banned in February. Suspicious trades on Iran invasion and Ayatollah Khamenei's death also surfaced the same month.
Both governors blamed the Trump administration for failing to implement ethical standards. Hochul said Republicans allowed an ethical Wild West without meaningful oversight. Pritzker framed Illinois' action as filling a federal vacuum while the Trump administration fails to provide federal oversight.
The crackdown extends beyond executive orders. New York State Gaming Commission sent Kalshi a cease-and-desist letter in October for unlicensed mobile sports wagering. Nevada Gaming Control Board is fighting Kalshi in court — a lower court temporarily blocked the platform from operating in the state. Coinbase Chief Legal Officer Paul Grewal predicted the Nevada case could reach the US Supreme Court, which could set precedent for the entire industry.
This article was written based on reporting from Cointelegraph.
