California bans officials from using inside knowledge to bet on prediction markets

By Jasper Ward

WASHINGTON, March 27 (Reuters) - California Governor Gavin Newsom on Friday issued an executive order barring state officials from using insider knowledge to bet on prediction markets like Polymarket and Kalshi.

The move comes amid concerns that government officials could use inside information to profit from such markets after an unknown trader made more than $400,000 betting that Venezuelan President Nicolas Maduro would be ousted from his position ahead of a U.S. mission to capture the leader.

All gubernatorial appointees are now banned from using any non-public information to personally profit or assist another person, including family or former business partners, from profiting off predictive markets, according to Newsom's order.

Polymarket and Kalshi are the two biggest prediction market platforms. Polymarket did not immediately respond to a request for comment.

Kalshi posted on X on Friday: "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."