CA Governor Bans State Officials from Trading Prediction Markets on Insider Info

California Governor Gavin Newsom is preparing to ban state officials from trading prediction markets using insider information.

What's the Scoop?

• Fresh Insider Ban: According to Politico, Governor Newsom is signing an executive order today that will ban appointed state officials with insider information from betting on prediction markets. Newsom confirmed the reporting on X, posting, "I’m signing an executive order banning California state officials from using insider information to place bets, including in prediction markets. We will not tolerate this kind of corruption in California."
• Partisan Framing: Not one to squander a political mudslinging opportunity, Newsom seized moment to dig at Trump, accusing the President's administration of a failure to enforce ethical standards that would prevent government insiders from abusing prediction markets.
• Already Illegal: Under the Commodity Exchange Act (the governing rulebook for commodity markets in America), using inside knowledge to trade prediction market is already very much prohibited in any context. Federally registered prediction market Kalshi levied fines and bans against two such traders in February, an opportunity the CFTC used to remind the public that it has, "full authority to police illegal trading practices occurring on any DCM, including those described above related to prediction markets."