California’s Governor Gavin Newsom signed an executive directive on Friday prohibiting state employees from leveraging confidential government information to place wagers on prediction betting platforms such as Polymarket and Kalshi.
The directive emerged following worries that public servants might exploit privileged information for financial gain on these platforms. These concerns intensified after an unidentified bettor earned over $400,000 by wagering that Venezuelan leader Nicolas Maduro would be removed from power before a planned U.S. operation to apprehend him.
Under Newsom’s new directive, all individuals appointed by the governor cannot utilize confidential information for personal financial benefit or to help others profit from predictive betting markets. This prohibition extends to assisting family members or former business associates.
Polymarket and Kalshi represent the largest prediction market websites. Polymarket has not yet provided a response to requests for comment.
Kalshi addressed the issue on social media platform X on Friday, stating: “At Kalshi, insider trading violates our rules, and we enforce them when we catch insiders … Government employees should be aware that trading on federally regulated markets using material non-public information violates the law.”
