California Gov. Gavin Newsom on Friday banned state-appointed officials with insider information from making bets on prediction markets as the popular gambling sites stoke controversy.
The executive order added to existing ethics rules that prohibit state officials from using information unknown to the public to enrich themselves or family members, as recent huge payouts on Kalshi and Polymarket have raised suspicions of insider trading.
Users can place bets on everything from sporting games to pop culture and politics – and anonymous traders have recently made millions with shockingly accurate wagers related to US-Israeli strikes on Iran and the ouster of Venezuelan dictator Nicolás Maduro in January.
Newsom’s press office tagged Polymarket and Kalshi in a mocking tweet late Thursday, asking what the odds were that the guv would ban insider trading on such markets within the next 24 hours.
Kalshi replied that the “odds are 100%” because “Kalshi already bans insiders.”
“This makes sense, and we already do this. At Kalshi, insider trading violates our rules, and we enforce them when we catch insiders,” a Kalshi spokesperson told The Post, adding that government employees “should be aware” that insider trading violates the law.
Polymarket did not immediately respond to The Post’s requests for comment.
Polymarket and Kalshi earlier this week added new guidelines to their platforms that seek to prevent insider trading – as members of Congress introduced a flurry of legislation targeting the companies, including a proposed ban on bets related to terrorism and war.
In his announcement of the new ban, Newsom took a swing at the Trump administration — the latest in a series of attacks from the lefty pol, who’s widely viewed as a likely 2028 Democratic presidential contender.
“At a time when Trump’s Washington is riddled with ethical failures and insider profiteering, California is drawing a bright line,” Newsom said in a statement. “We’re not going to tolerate this kind of corruption in California.”
Dems have criticized the Trump family’s ties to prediction markets. Donald Trump Jr. is an adviser to both Kalshi and Polymarket.
Newsom is not the first lawmaker to take aim at prediction markets.
Rep. Seth Moulton (D-Mass.) announced Wednesday that he has banned all of his office staffers from using prediction markets.
Sens. John Curtis (R-Utah) and Adam Schiff (D-Calif.) have pushed legislation to hand over control of prediction markets to state regulators, not federal ones, arguing that the companies’ new anti-insider trading guidelines are not enough.
Two separate bipartisan proposals introduced in the House and Senate this week seek to ban members of Congress and the president from placing bets on prediction markets related to politics.
Polymarket’s main trading platform is located offshore and the company does not technically allow American bettors to use the site, so it is able to escape CFTC regulations.
But there are numerous online guides that detail how US users can skirt these blockages using a VPN, raising questions around how the rules are enforced.
Rival Kalshi – an American prediction market – has said it “doesn’t allow markets directly tied to death” on its platform, after suspected insiders made bets worth $54 million over former Iranian Supreme Leader Ayatollah Ali Khamenei’s ouster.
Kalshi is being sued for refusing to pay out the bets after Khamenei was killed in US-Israeli air strikes.
The company also recently took its first punitive actions against alleged inside traders. It banned and fined a MrBeast employee who allegedly traded on contracts related to the YouTuber’s content, as well as Kyle Langford, a former GOP gubernatorial candidate in California who bet on himself to win.
This story originally appeared on NYPost
