California Governor Gavin Newsom Bans Appointees, Associates From Betting On Prediction Markets Using Confidential Information

California's governor Gavin Newsom signed an executive order banning state appointees with insider information from betting on prediction markets, and extends the ban to spouses, family members, and former business partners, taking effect immediately.

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ABC10

Newsom framed the move as a moral stand against 'get-rich-quick' public service.

bloomingbit

The policy references cases where insiders profited from U.S. strikes on Iran and the Maduro arrest timing.

It signals a state-level escalation ahead of federal legislation aimed at restricting prediction-market trading by government insiders.

The order covers 'gubernatorial appointees' and their close associates, prohibiting use of confidential information to profit from prediction markets.

It also bars using information to help others—like spouses or partners—from profiting.

Cointelegraph

Newsom's office highlighted instances such as six suspected insiders who profited from Iran strikes and a $410,000 bet placed hours before Maduro's arrest.

Industry responses show Kalshi and Polymarket tightening their own rules in response to scrutiny.

Democrats have introduced federal bills—the BETS OFF Act and the PREDICT Act—to bar insiders from betting on prediction markets.

“California Governor Gavin Newsom signed an executive order on Friday, expanding rules to curb public servants and those close to them from benefiting from insider trading on prediction markets tied to political or economic events they can influence or are privy to”

Cointelegraph

The bills would prohibit the President, lawmakers, and others from wagering on political events or sensitive events like war, with penalties and revenue implications.

Critics argue such restrictions could curb insider advantages, while supporters frame it as essential integrity guardrails in rapidly evolving prediction platforms.

Industry reactions emphasize that insiders have already faced tighter controls.

Kalshi frames insider trading as against policy and asserts enforcement.

KTLA

Polymarket has publicly tightened its own guidelines and surveillance.

Newsom’s move has been echoed by lawmakers, who cite high-profile bets as evidence that timing and access to non-public information can distort markets and policy outcomes.

Newsom’s order adds to a broader ethics crackdown around prediction markets and insider trading, with explicit references to Iran and Venezuela-related bets in the administration’s disclosures.

Cointelegraph notes lawmakers’ concerns that insiders may exploit confidential information in sensitive events, while The Block highlights the ongoing push toward tighter surveillance and limits on participants.

New York Post

The move also aligns with domestic political dynamics, as Democrats argue for stronger controls amid a surge of congressional scrutiny.