Wisconsin banned government workers from sharing or using insider information to benefit financially, effectively limiting state officials’ trading rights at prediction markets.
Gov. Tony Evers (D) signed Executive Order #294 on Thursday to “protect public trust and integrity” by limiting how government employees can leverage their information and positions of trust.
Key Takeaways
- Wisconsin had not identified any cases of insider trading by government workers.
- One U.S. soldier made about $400,000 using inside information related to a military operation.
- The CFTC chair said this week that prediction markets and sports betting were distinctly different.
Wisconsin officials were already required to maintain integrity and transparency as part of their jobs. The new executive order — motivated by the “growing proliferation” of prediction markets — adds another layer to that, by limiting employees’ ability to use sensitive information to turn a profit.
“All Wisconsin state executive branch employees are strictly prohibited from disclosing or using any nonpublic information obtained due to their public service to personally profit from, avoid loss from, or assist another person or entity, including spouses and family members, in profiting or avoiding loss from participation in prediction markets,” the executive order reads. “Any violation of this order may result in dismissal, referral to the Wisconsin Ethics Commission, or other appropriate sanctions and may be referred to law enforcement.”
Prediction markets are already live in all 50 states. One survey found that 15% of Americans had purchased prediction contracts related to sports, suggesting that the total figure across all industries was even higher.
Wisconsin has not identified any incidents of insider trading or suspicious trading by government officials. The executive order is purely preemptive, not reactive.
“Maintaining public trust and confidence in our state government demands and depends upon transparency, accountability, integrity, and upholding the fundamental tenet of public service in decisions that, above all, the work must be for the benefit of the public good and not for the personal gain or benefit of any individual worker,” Gov. Evers said in an announcement of the signing of the executive order.
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Preventing losses of integrity
Prediction markets allow individuals to buy and sell contracts associated with outcomes in sports, finance, politics, entertainment, and other industries.
Platforms such as Kalshi and Polymarket have soared in popularity over the last year, growing to rival legal sportsbooks with sports event contracts, while also operating uncontested in other markets.
The surging number of users at these platforms has led to several scandals, including those involving government employees. For example, a U.S. special forces soldier involved in the capture of former Venezuelan President Nicolás Maduro made nearly $400,000 by predicting that a capture would occur.
“State workers in Wisconsin work hard every day in dedicated service of the people of our state, often going above and beyond their job description and daily responsibilities to support Wisconsinites and our communities and meet their needs,” said Gov. Evers.
Wisconsin joins a growing list of states that have banned insider trading, which already includes California, Illinois, New York and Maryland.
The U.S. Senate at the end of April also unanimously approved a measure that prevented them from using prediction markets.
A vocal conflict
Prediction market news — and the controversy that followed — has dominated headlines over recent months.
State gaming officials have been among the loudest critics of prediction platforms. They argue that contracts offered by operators allow them to act as unlicensed sports betting providers and that they should be required to receive state licensing before conducting operations.
Prediction operators have not been swayed, adamantly reminding officials that their federal regulation from the Commodity Futures Trading Commission (CFTC) supersedes state law. CFTC Chair Michael Selig also said this week that sports betting and prediction markets were “two separate things,” suggesting that stricter regulations are still far away.
