Kathy Hochul Bans New York State Employees From Prediction-Market Betting

New York Governor Kathy Hochul signed an executive order banning state employees from participating in prediction-market betting, a move described by multiple outlets as a new ethics layer aimed at preventing insider trading on event-based platforms.

“New York Workers Banned From Gambling on Prediction Markets A law that has taken effect immediately bans New York workers from making bets that are a sure win”

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The ban was framed as a response to the risk that confidential information could be used to profit, with Hochul saying, “Getting rich by betting on inside information is corruption, plain and simple.”

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The order prohibits state employees from using nonpublic information obtained through their official duties to profit or avoid losses in prediction markets, and it also bars them from assisting others in doing so.

One report says the order “takes effect immediately,” and another says it was signed on Wednesday, April 21.

The policy also criticized what Hochul called an “ethical Wild West” around prediction markets, while describing potential consequences for violations that may lead to dismissal and could invite law enforcement action.

The same reporting tied the executive order to a broader crackdown that included New York Attorney General Letitia James suing Coinbase and Gemini over alleged illegal gambling schemes tied to prediction markets.

In parallel, Illinois Governor JB Pritzker issued a similar executive order earlier in the week, reinforcing the idea that state ethics rules are tightening across jurisdictions.

Alongside Hochul’s executive order, New York officials pursued court action against prediction-market platforms, with Attorney General Letitia James suing cryptocurrency companies Coinbase and Gemini.

The New York case was described as targeting platforms that let users bet real money on real events, and the lawsuits sought remedies including forcing the companies to refund consumers, forfeit illegal profits, and pay a fine equal to three times those profits.

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James argued that “Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” and she said the platforms operate unlicensed gambling websites that expose 18-year-old New Yorkers to addiction.

The reporting also said James connected the prediction-market lawsuits to other enforcement actions, including a separate February lawsuit against Valve Corporation over virtual loot boxes in games like Counter-Strike or Team Fortress.

In that Valve dispute, the attorney general alleged the loot boxes function like slot machines, while Valve responded that randomized digital treasure chests are “more like packs of baseball cards,” and that players don’t have to pay to play.

Coinbase and Gemini, in contrast, argued their operations fall under federal regulations and that their exchanges are legitimate financial tools rather than casinos.

One outlet reported that Gemini Titan’s user agreements classify the platform as an official market registered with the federal Commodity Futures Trading Commission, while Coinbase CEO Brian Armstrong told shareholders in February that prediction markets are “just a new type of financial asset for investors to trade.”

The executive order and lawsuits were also linked to concerns about state taxes and consumer protections, including claims that the platforms skirt state taxes that are supposed to fund public schools and sports for underserved youth.

Together, the reporting depicts a state-level push that treats prediction markets as gambling under New York law while the companies frame them as commodities under federal oversight.

Several reports tied the policy push to specific examples of allegedly suspicious trading tied to geopolitical and military events, including wagers connected to Venezuela’s Nicolas Maduro and military strikes in Iran.

“Bloomberg Government Print Share To: New York government employees are banned from using private government information to trade on popular prediction market platforms, Gov”

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One account said Hochul called out suspicious wagers and large payouts based on insider knowledge, specifically a $400,000 bet and payout to an anonymous trader about Venezuela’s Nicolas Maduro leaving office, and “over $1 billion in perfectly timed bets on military strikes in Iran.”

Another report similarly described an anonymous user winning over $400,000 in January on a bet that Nicolas Maduro would soon be out of office, and it said that since then “over $1 billion has been won by suspiciously timed bets on specifics about the war in Iran.”

The Block also described the January Polymarket wager that netted $400,000 and said lawmakers raised alarm bells after a Polymarket account wagered that Venezuelan President Maduro would be “out” by the end of the month.

In that same reporting, The Block said Democratic Rep. Ritchie Torres introduced a bill to ban federal elected officials, political appointees, and executive branch employees from making bets on prediction markets involving “government policy, government action or political outcome.”

Business Insider’s framing emphasized the broader concern that state employees may have access to nonpublic information that could impact certain prediction markets, even while noting that “no hard proof of insider trading by government officials has come to light.”

The Decrypt report added that the New York executive order criticized the Trump CFTC, saying it has no standing to regulate prediction markets and that even if it did, it has failed to establish meaningful rules to prevent “rampant insider trading.”

Across these accounts, the insider-trading examples and the cited legislative responses form the factual basis for why states say they need ethics guardrails for public servants.

The executive order’s enforcement posture was described as both disciplinary and referral-based, with reporting saying violations may lead to dismissal and could invite law enforcement action.

One outlet said Hochul’s directive makes clear that violations may lead to dismissal and could invite law enforcement action, while explicitly prohibiting state employees and officers from assisting others in profiting on confidential information through prediction markets.

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Another report said the order bars covered state officers and employees from using confidential information acquired in the course of their official duties to further their personal financial interests through these markets, and it also bars them from assisting others in profiting on confidential information.

The policy was also tied to existing ethics frameworks, with one report saying it builds on New York’s existing Code of Ethics and is intended to strengthen safeguards against public corruption.

A watchdog group, Reinvent Albany, praised the ban for “bright lines and clear expectations help reinforce ethical behavior,” while pressing Hochul for additional funding for the Commission on Ethics and Lobbying in Government and for upgrades to financial disclosure systems.

The Block’s reporting quoted the executive order’s language that “No officer or employee of a state agency who serves at the pleasure of the Governor or their appointing authority” may use nonpublic information to seek profit or avoid loss in a prediction market or similar service.

That same outlet described Illinois’s parallel executive order and said it warned that the setup can open the door to insider trading and misuse of confidential information.

Business Insider added that Hochul’s order is part of a pattern, noting that governors in New York, Illinois, and California have moved against prediction market insider trading.

It also said both Kalshi and Polymarket have implemented measures aimed at combating insider trading, and it referenced the White House warning employees against making prediction market bets amid the war in Iran.

The reporting also shows a direct clash between state efforts and federal oversight claims, with the federal Commodity Futures Trading Commission described as asserting exclusive jurisdiction over prediction markets.

“New York Governor Kathy Hochul signed an executive order prohibiting state employees from participating in prediction markets using classified information”

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The Block reported that Commodity Futures Trading Commission Chair Michael Selig said his agency has “exclusive jurisdiction” over prediction markets and that he sued Illinois, Arizona and Connecticut earlier this month over their actions to shut down what the agency calls “federally regulated designated contract markets.”

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Decrypt similarly described the Trump administration as defending prediction market platforms and said the CFTC claims they are exempt from state gambling laws and should be regulated at the federal level.

In Hochul’s executive order, Decrypt reported that she took aim at the Trump CFTC, writing that it has no standing to regulate prediction markets and that even if it did, it has failed to establish meaningful rules to prevent insider trading.

The Block also described how states assert platforms violate local gaming and gambling laws, particularly related to sports-related bets, even as the companies argue they are commodities.

Platform responses were also included in the reporting, with The Block describing Kalshi’s actions against insider trading involving candidates and saying it opened three insider cases involving candidates, fined and suspended them for making bets on their own races.

The Block named the last candidate fined by Kalshi as Mark Moran, who is running in the Democratic primary for Virginia’s U.S. Senate seat, and it quoted Moran saying he “wanted to get caught.”

The Decrypt report added that in February, two Israelis with military ties were arrested and accused of placing bets on the timing of a planned attack on Iran last summer, and it also referenced a January Polymarket trader pocketing “hundreds of thousands of dollars” after correctly guessing details of the United States’ attack on Venezuela.

Across these accounts, the stakes extend beyond state ethics rules into the legal fight over who regulates prediction markets and how platforms police insider trading risks.