Gov. Hochul bans insider prediction market trades for New York State workers
New York Gov. Kathy Hochul has signed an executive order blocking state workers from using confidential government information to make money on prediction markets, calling the practice a threat to public trust.
The order was signed on Wednesday (April 22) in Albany and took effect immediately. It applies to covered state officers and employees. They are barred from using “any nonpublic information obtained in the course of their official duties” to seek gains or avoid losses through trades on prediction market platforms. They also cannot help other people profit by passing along inside information.
Violations can bring dismissal, other discipline, and possible referrals to law enforcement or ethics agencies.
“Getting rich by betting on inside information is corruption, plain and simple,” Hochul said in the state’s announcement. “Our actions will ensure that public servants work for the people they represent, not their own personal enrichment.”
Prediction markets let users buy and sell contracts based on whether future events happen. The governor’s office said those events can include “outcomes of military activity, election results, or the severity of natural disasters,” along with “obscure and manipulable events” such as “the attire of public officials at appearances” or “the volume of social media posts made by an individual.”
How the Hochul insider trading order reaches prediction markets
The executive order says ethics rules need to keep pace with newer trading platforms. It states that “the maintenance of public trust is founded on the principle that public servants are charged with using their positions to benefit the public good,” and that officials should not use access to government information “for personal financial gain.”
It also says the “recent proliferation of prediction markets” has raised the risk that people with privileged knowledge may try to profit by “trading on insider information.”
Each public authority in New York is directed to adopt matching policies for officers and employees who serve at the pleasure of the appointing authority. The order defines a prediction market as an exchange-traded platform or service not licensed or permitted by the New York State Gaming Commission, where participants trade contracts tied to future events including elections, sports, economic indicators, or the actions and speech of individuals.
The move lands as prediction markets face heavier scrutiny across the country. We previously reported the controversy around a Polymarket contract tied to Venezuelan leader Nicolás Maduro, where questions were raised about settlement decisions and whether insiders could benefit from opaque processes.
In a video statement posted on X, Hochul pointed to what she called “really suspicious bets with huge payoffs” including the Polymarket contract tied to Venezuelan leader Nicolás Maduro, markets on the timing and location of military actions in Iran, and even bets on the length of White House press briefings. She said insider trading in stocks has long been illegal, but argued similar conduct on prediction markets can happen with “zero consequences.”
She also drew a contrast with Washington, saying, “some in Washington think this is fair, but here in New York, we say no.”
The state has also been aggressive in policing other financial platforms. State regulators have pursued major crypto companies including Coinbase and Gemini in separate legal actions centered on compliance, disclosures, and consumer protections.
At the same time, state Sen. Joseph Addabbo Jr. has pushed legislation that would create a regulated path for prediction markets in New York, arguing oversight is better than leaving the activity offshore or unlicensed.
Hochul’s office said the order comes amid “increasing public scrutiny over the role of prediction markets and the need for further regulations of this emerging industry.” It also said New York is taking steps against platforms that engage in “unlicensed and unlawful gambling operations.”
Featured image: Marc A. Hermann / MTA / CC BY 2.0 / Canva
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