- Arizona Governor Katie Hobbs signed an executive order to prohibit state government employees from using non-public knowledge for insider trading on prediction markets.
- The executive order references multiple recent instances of government workers with insider knowledge profiting from insider trading.
PHOENIX – A new executive order from Arizona Governor Katie Hobbs prohibits insider trading by state employees for the use of prediction market platforms.
Executive Order 2026-02 specifically prevents executive branch employees of the state of Arizona from using information not currently available to the public for the purpose of trading on prediction markets, such as Kalshi and Polymarket.
Insider trading is the disclosure or use of non-public information for the personal benefit of the person holding such information and/or anyone who they share it with for the purpose of monetary gains.
The act of insider trading, in relation to the stock market, is illegal when people who are not part of the company or organization buy or sell securities with non-public information, while executives and employees are legally able to use such information when trading as long as they adhere to SEC guidelines.
This executive order will prevent that from happening inside the Arizona state government. There has been a long standing debate as to whether prediction markets should be governed the same as legal sports betting sites since they offer event contracts on sporting events, but the Commodity Futures Trading Commission (CFTC) maintains that they should be treated similarly to the stock market.
While insider trading is illegal on such prediction markets, this executive order is the first of its kind to explicitly prevent state employees from profiting off of knowledge unavailable to the public.
Those found to be involved in insider trading within the Arizona government may be dismissed, as well as face other potential sanctions and law enforcement. All information not available to the public that is gathered from public service is deemed confidential, if it carries the possibility of being used in trades.
The order referenced multiple instances of government workers walking away with hundreds of thousands of dollars after making large wagers on government related activities, such as Venezuelan president Nicolas Maduro’s removal from office and Ayatollah Ali Khamenei of Iran.
