New York and Illinois have moved to tighten ethics rules around prediction markets, blocking state employees from using government insider knowledge to trade on bets about real-world events.
On April 22, New York Governor Kathy Hochul signed Executive Order 60, which forbids covered state officials and employees from using nonpublic information obtained through their jobs to profit — or avoid losses — in prediction markets. The order also bars employees from helping others use such information. Hochul framed the move bluntly: “Getting rich by betting on inside information is corruption, plain and simple,” calling the current landscape around prediction markets an “ethical Wild West.” Violations can lead to dismissal or referral to law enforcement or ethics authorities.
A day earlier, Illinois Governor J.B. Pritzker issued Executive Order 2026-04 with nearly identical language. His order says no state employee may trade on nonpublic information or assist someone else in doing so, and it took effect immediately. Pritzker’s office warned that prediction markets — which can let people wager on everything from elections to military events — have expanded “without any oversight,” creating openings for insider trading and misuse of confidential information.
The orders come as prediction markets surge in popularity and trading volume. Market data showed March trading topped $20 billion, spread across sports, politics and global events, heightening calls for clearer rules about who can trade and what conduct should trigger enforcement. New York’s order specifically referenced reported trades tied to military activity and elections, raising questions about whether people with access to confidential government information have profited.
State action is already targeting market operators as well. New York’s order adds pressure to previous steps against Kalshi: the New York State Gaming Commission issued a cease-and-desist to the company in October, alleging it operated an unlicensed mobile sports wagering platform. Kalshi is also battling regulators in Nevada, where a judge recently extended a ban preventing the firm from offering event contracts without a gaming license.
Taken together, the moves from New York and Illinois signal that states are moving quickly to police prediction markets — including those linked to crypto and decentralized platforms — even as federal oversight and the legal status of such markets remain contested. For crypto traders and operators, the message is clear: regulatory scrutiny is intensifying, and using or facilitating trades based on nonpublic government information could carry serious career and legal consequences.
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