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New York and Illinois have issued new executive orders aimed at stopping state employees from using nonpublic government information to profit on prediction markets and event contracts. Illinois Governor JB Pritzker signed Executive Order 2026-04 on April 21, and New York Governor Kathy Hochul followed a day later with Executive Order 60. Both took effect immediately.
he orders add to growing scrutiny of prediction markets over insider-trading and ethics risks. It also comes as the United States Commodity Futures Trading Commission (CFTC) and several states continue fighting over who has authority to regulate prediction market platforms.
The Orders Stop Insider Trading, Not All Trading
Illinois did not impose a blanket ban on all prediction market activity by public workers. Its order applies to executive branch state agencies and bars state employees, officers, appointees and board members from using nonpublic information gained through their jobs to participate in a prediction market or event contract or to help someone else do so.
New York’s order is also aimed at insider use of official information, not a total trading ban. It covers state agency officers and employees who serve at the pleasure of the governor or their appointing authority, along with governor-appointed public authority members. Violations can lead to dismissal, other sanctions, and referrals to law enforcement or state ethics authorities.
Both States Are Tying Ethics Rules to Market Growth
Illinois said the order was needed because prediction markets have grown quickly without enough safeguards against insider trading, market manipulation and misuse of confidential information. The governor’s office also said the order strengthens existing state ethics and procurement rules as online event-based betting spreads.
New York’s order also addressed the platforms themselves more directly. Hochul’s order says the state views unlicensed prediction markets as gambling operations under state law and argues that federal regulators have not imposed meaningful ethics standards to prevent insider trading. The order also defines a prediction market as an exchange-traded platform or service not licensed by the New York State Gaming Commission, while carving out ordinary futures and options on securities, commodities and other goods or services.
States and the CFTC Are Still Clashing
The backdrop is shifting quickly. On April 2, the CFTC sued Illinois, Arizona and Connecticut to block what it called unlawful state efforts to regulate prediction markets, arguing that the agency has exclusive authority over these event-contract markets under federal commodities law.
Platforms are responding to that scrutiny as well. Reuters reported on April 22 that Kalshi suspended three congressional candidates for betting on their own elections under new safeguards against political insider trading. Taken together, the state orders show that even as the CFTC argues for exclusive federal authority over these markets, states are still moving to tighten ethics rules around who can trade on government knowledge.
