What to Know
- Executive Order 60 signed by Kathy Hochul on April 22 blocks New York state staff from using nonpublic information in prediction markets
- Illinois Executive Order 2026-04 from Governor JB Pritzker took effect a day earlier with nearly identical language
- Prediction market volume hit a record $20 billion in March, fueling political pressure on platforms like Kalshi
- Violations in New York can trigger dismissal or referral to law enforcement and ethics regulators
The New York prediction markets ban dropped on Wednesday, and it landed with teeth. Governor Kathy Hochul signed Executive Order 60 on April 22, telling covered state employees they can no longer use nonpublic information from their day jobs to profit, avoid losses, or tip off anyone else trading on platforms like Kalshi or Polymarket. One day earlier, Illinois Governor JB Pritzker had quietly done the same thing, with paperwork that took effect the moment it was filed.
What the New York Prediction Markets Ban Actually Says
The order is short, blunt, and aimed at one specific behavior: trading event contracts using information you got because of your government job. That covers everything from advance knowledge of a regulatory action to a heads-up about a contract award. Hochul’s office framed New York prediction markets ban as a first-in-the-nation move against insider trading on event contracts.
Helping someone else do it is also out. Tipping a friend, a relative, a campaign donor, anyone. The order treats the second-hand trade the same as the first-hand one. Penalties run from dismissal to referral to law enforcement or the state ethics board, depending on how bad the conduct gets.
Hochul did not mince words. “Getting rich by betting on inside information is corruption, plain and simple,” she said in the announcement, before lobbing a phrase that is going to get quoted for a while: she called the prediction-market space an “ethical Wild West.”
Getting rich by betting on inside information is corruption, plain and simple.
Illinois Moved First, and Pritzker Used Almost the Same Words
Pritzker beat Hochul to the press release by one day. Illinois Executive Order 2026-04 bans state employees from trading prediction markets or event contracts on nonpublic information they picked up at work, and it bans them from feeding that information to anyone else who plans to trade.
His office described prediction markets as a place where people can wager on real-world events “without any oversight,” and warned that the structure invites insider trading. The Illinois release said the order strengthens existing ethics rules as the platforms keep growing. The two orders read like they were drafted in the same room. They were not, but the political logic is identical.
- Effective immediately upon filing in Illinois, with no grace period
- Covers all state employees, not just gambling regulators
- Bans both direct trading and tipping off third parties
- Reinforces, rather than replaces, the state’s existing ethics framework
Why Did Two Governors Move Within 24 Hours?
Because the numbers got too big to ignore. Prediction market volume hit record highs in March, and reporters kept finding suspicious trading patterns around the kind of events that government insiders see coming. New York’s order points to reported trading around military activity, elections, and other public events.
That is the polite way to put it. The blunt version is that screenshots of well-timed trades have been circulating for months, and state ethics offices have been getting calls. Per prediction market trading volume data, monthly turnover scaled past $20 billion in March, with sports, politics, and geopolitical events leading the surge. When a market that size can be moved by a single non-public memo, regulators stop waiting for federal guidance.
There is also a federalism angle. Federal oversight of event contracts is stuck in court and stuck in committee. States are not waiting. They are using the tools they already have, executive authority over their own employees, to put down a marker. Whether the marker holds up is a different question.
Kalshi Was Already in the Crosshairs
The new ethics order is not the first shot New York has fired at the sector. Hochul’s office reminded reporters that the New York State Gaming Commission sent Kalshi a cease-and-desist letter in October, alleging the platform was running an unlicensed mobile sports wagering operation in the state. That fight is still live.
And it is not just New York. The Kalshi Nevada ban was extended this month after a Carson City judge sided with state gaming regulators, blocking the company from offering event contracts in Nevada without a gaming license. Kalshi has argued that its CFTC registration preempts state gaming law. So far, state judges keep disagreeing.
Stack the actions on top of each other and a pattern shows up. Cease-and-desist in October. Nevada injunction extended in April. Two governors banning their own staff from trading the day after. The federal regulator stays quiet while the states swing.
What This Means for Traders, Platforms, and the Industry
If you trade on Kalshi or Polymarket as a private user in New York or Illinois, nothing changes for you today. The orders apply to state employees, not the general public. But the framing matters. Two governors just labeled the activity “corruption” and “Wild West” in official documents. That language ends up in court briefs.
For the platforms, the message is harsher. Every state-level enforcement action makes the federal preemption argument harder to sell, because each new order builds a record that state interests are real and ongoing. A platform that wants to operate nationally now has to think about ethics rules in 50 jurisdictions, not just one CFTC docket.
For the industry as a whole, the April 22 orders mark the moment when prediction markets stopped being treated as a quirky CFTC niche and started being treated as a public-integrity problem. That reframing is the part traders should watch. Once a sector is defined as an integrity issue rather than a financial-products issue, the political economy of regulation changes. Ethics committees get involved. State attorneys general get involved. Inspectors general start asking for trading records. None of that is fatal to prediction markets, but it changes the cost of doing business at the margin, and it changes who gets called to testify the next time a well-timed trade lands on the front page.
The Federal Vacuum Is Doing the Work
Strip out the press-release language and the real story is about who is filling the regulatory gap. Congress has not passed anything specific to event contracts. The CFTC is mid-fight over its own jurisdiction. Courts have issued mixed signals across multiple states.
Into that vacuum, governors are moving with the one tool they fully control: executive authority over their own workforce. It is a narrow tool. It does not touch private traders, it does not shut down any platform, and it does not change federal law. But it sets a tone, and it puts state employees on notice that an inside trade on a prediction market will be treated like an inside trade on a stock.
Call it pragmatism, call it grandstanding. Either way, two governors just decided the rules of the road for their own people without waiting for Washington. More states will follow. The only real question is how many, and how fast.
Frequently Asked Questions
What is the New York prediction markets ban?
Executive Order 60, signed by Governor Kathy Hochul on April 22, 2026, prohibits covered New York state officials and employees from using nonpublic information acquired through their jobs to profit or avoid losses in prediction markets. It also bars them from sharing that information with anyone else who plans to trade event contracts.
What does Illinois Executive Order 2026-04 cover?
Signed by Governor JB Pritzker on April 21, 2026, Executive Order 2026-04 bars Illinois state employees from trading on prediction markets or event contracts using nonpublic information from their official duties. It also blocks them from passing such information to any third party trading those markets, and it took effect immediately.
Why are states targeting prediction markets now?
Prediction market volume reached a record above $20 billion in March 2026, and reporters surfaced suspicious trading patterns around elections, military events, and policy decisions. With federal oversight contested in court, states are using executive authority over their own employees to address insider-trading concerns without waiting for Congress or the CFTC.
Does the ban affect Kalshi or Polymarket users?
Not directly. The New York and Illinois orders apply only to state government employees, not the general public. Private traders can still use Kalshi or Polymarket where the platforms are legally available. Kalshi, however, faces separate state actions, including a Nevada court injunction and a New York cease-and-desist letter from October 2025.
This article is for informational purposes only and does not constitute investment advice. Every investment and trading decision involves risk. Readers should conduct their own research before making any financial decisions.
Interesting that Illinois moved within days of New York. EO 2026-04 specifically targets state staff trading on insider info, but who’s actually enforcing this on Kalshi? The exchange can flag suspicious accounts, but state AGs don’t have subpoena power over CFTC-regulated venues without a cooperation agreement.
ban the employees sure, but the real insider flow was never showing up under a .gov email anyway
So what counts as insider info for a prediction market contract on, say, a budget vote? If a staffer reasonably believes a bill passes and trades on it, is that MNPI or just a person having an opinion?
Kalshi volume is going to eat this and keep growing.
Seen this movie before. 2012 Intrade got pushed out under similar pretexts, 2018 PredictIt got its no-action letter yanked, and every time the contracts just migrate. Regulators keep confusing the messenger with the signal.
The April 22 effective date is suspicious timing given the budget cycle in Albany. Feels less like ethics reform and more like somebody got caught sniping a contract and this was the fastest CYA available.