New York bans government employees from insider trading in prediction markets

New York has Preventing state employees from using inside information for trading Prediction markets. In an executive order signed today and seen by WIRED, Gov. Kathy Hochul prohibited state government workforces from using “any non-public information obtained in the course of their official duties” to participate in prediction market platforms, or to help others profit using those services.

“Getting rich by betting on inside information is corruption, plain and simple,” Hochul said in a statement provided to WIRED. “Our actions will ensure that public servants work for the benefit of the people they represent, not for their own enrichment. While Donald Trump and D.C. Republicans turn a blind eye to the moral Wild West they have created, New York is stepping up to lead by example and stamp out insider trading.”

The order was not prompted by any specific insider trading incidents involving New York State employees. “There are no known instances of this behavior yet,” says Sean Butler, deputy director of communications for the New York State Executive Chamber.

This is the latest in a wave of initiatives aimed at reducing Insider trading In prediction markets such as Kalshi and Polymarket, which are the most popular among these platforms in the United States. California Governor Gavin Newsom Issued A similar executive order was issued last month, prohibiting Golden State employees from forecasting insider trading in the market. Yesterday, Illinois Gov. J.B. Pritzker He follows suit.

In addition to these Executive Orders, Congress has also issued… He introduced several bills It aims to reduce market manipulation and corruption in the industry, including legislation that prevents elected officials from participating in prediction markets. Some individual politicians discourage or Explicit ban Their employees are able to purchase contracts for events on those platforms. According to what CNN reported from the White House Recently warned Executive authority employees do not trade in prediction markets. When WIRED asked the White House about its policies on these markets earlier this year, it pointed to existing regulations prohibiting gambling activity but did not respond to requests for clarification about whether it considered anticipated participation in the market to constitute gambling.

The Commodity Exchange Act, which covers derivatives markets, already prohibits insider trading, which means that both public sector employees and private sector employees are breaking the law if they activate insider trading in event contracts. Rather than creating new rules, New York’s executive order primarily serves to affirm the state’s commitment to enforcing existing laws and to clarify how these laws and the Code of Ethics for Employees apply to prediction markets.

However, with several high-profile examples of suspected insider trading at Polymarket focused on geopolitical events, ranging from the seizure of… Former Venezuelan President Nicolas Maduro To the blows in Iran’s ongoing war, many onlookers — including prominent lawmakers — see that as the case Such a flammable issue. They are racing to write laws and orders that reaffirm and reaffirm existing rules.

“This makes sense, and we already do it,” says Elizabeth Diana, a Calci spokeswoman. “At Calci, insider trading violates our rules, and we enforce them when we catch insiders.” “Government employees should be aware that trading in federally regulated markets using material information that is not publicly available is a violation of the law.” (Polymarket did not immediately respond to a request for comment.)

In the face of backlash, Polymarket and Kalshi recently announced new initiatives to combat insider trading.

In February, Calci announced its decision to suspend and fine two people Violation of market manipulation policies; The company also confirmed that it had reported these cases to the Commodity Futures Trading Commission, the federal agency that oversees prediction markets. In March, it launched an enhanced market surveillance arm, to proactively prevent political candidates from trading in markets related to their campaigns.