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PHOENIX (AZFamily) — Arizona Gov. Katie Hobbs signed an executive order prohibiting state employees from using confidential information to profit from prediction markets.
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The , signed on Wednesday, bars public officers and employees from using or disclosing nonpublic information to pocket money from betting on prediction markets.
Employees are also banned from using state secrets to avoid financial losses or helping others in the same way through prediction market wagering. Employees who do so risk disciplinary action, including possible termination, and being referred to law enforcement.
“Arizonans deserve a state government that works for them, not one where insiders exploit public service for their own gain,” Hobbs said in a statement.
Hobbs called these “commonsense ethical standards” for Arizona executive branch employees.
“Public service is a privilege, and we will not tolerate anybody abusing that privilege to line their own pockets,” she added.
The ban, however, does not apply to Arizona state agencies led by an elected state official, the Corporation Commission, Arizona state legislature staff members or the judicial branch. In her executive order, however, Hobbs encouraged them to adopt similar policies for their employees.
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Prediction markets allow people to bet on a multitude of topics and events, including politics, election outcomes, government and military actions, and local affairs. There have been several high-profile incidents of traders using insider information to profit on prediction markets, such as Kalshi and Polymarket.
This year, a US special forces soldier was charged with using his access to classified information about the US mission to capture Venezuelan President Nicolas Maduro to win more than $400,000 on Polymarket.
Former US Rep. George Santos is under investigation for boasting that he would be at President Donald Trump’s State of the Union address, but then bet against his own attendance.
“Kalshi already bans insider trading and imposes penalties for violations. Formalizing this and making it an industry standard across all prediction markets is a welcome measure,” Jacki McGavick, a spokesperson for the company, said in a statement Wednesday.
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