Gavin Newsom is taking action against public officials who profit from prediction markets.
Key Takeaways
- Gov. Gavin Newsom said his office won’t tolerate prediction market “corruption” in California.
- The executive order bans appointees from using nonpublic information or providing it to others.
- Kalshi and Polymarket have claimed they already ban insiders.
The California governor issued an executive order Friday that bans gubernatorial appointees from using nonpublic information to purchase contracts on markets offered by platforms like Kalshi and Polymarket.
Officials are also prohibited from helping family members, business partners, and others make money off of real-world event contracts through inside information.
Newsom’s stance comes at a time when critics have challenged President Donald Trump’s administration and accused public officials of profiting from nonpublic information to manipulate prediction markets in war, politics, and federal decision-making.
“Public service should not be a get-rich-quick scheme,” Newsom said in a statement released by his office. “At a time when Trump’s Washington is riddled with ethical failures and insider profiteering, California is drawing a bright line: If you serve the public as a political appointee, you serve the public - period. We’re not going to tolerate this kind of corruption in California.”
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Providing examples
Newsom’s office said the order was issued “amid mounting reports suggesting that individuals in the federal government” have used access to sensitive information for profit, “placing week-timed bets ahead of major Trump administration actions.”
Newsom said in his executive order that individuals have made large sums of money from prediction market sites on U.S. military operations involving Venezuela, Iran, and drug cartels.
His office listed several examples, including six alleged insiders who are suspected of purchasing contracts worth $1.2 million on a U.S. strike against Iran. The accounts were funded just days before the military intervention, and contracts were bought hours before the market settled.
“California already has some of the strongest ethics laws in the nation, including strict conflict-of-interest rules and prohibitions on using public office for private gain,” the governor’s office said. “This executive order reinforces those protections by explicitly banning gubernatorial appointees from using non-public information for profit in prediction markets.”
Responding to profiting
Kalshi responded to a social media post from Newsom’s office, saying the platform already prohibits insiders.
The odds are 100% Governor
— Kalshi (@Kalshi) March 26, 2026
Because Kalshi already bans insiders https://t.co/zgNDFFWRJq pic.twitter.com/RNEyMfy1fO
Polymarket announced new “Enhanced Market Integrity Rules” on Monday as the prediction platform attempts to crack down on users manipulating markets with nonpublic information. The operator said it has already banned users with stolen confidential information from trading. They also can’t use illegal tips, and public officials, like Congress members, can’t influence markets on legislative proposals.
Prediction market news has mostly been centered around lawsuits with state sports betting regulators, but the heat has been turned up nationally on non-sports event outcome markets.
Earlier this month, two U.S. lawmakers filed the End Prediction Market Corruption Act, a federal bill that would make it illegal for government officials, including the President and members of Congress, to profit from inside information.
