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New York and Illinois Move to Restrict Insider Trading in Prediction Markets

New York and Illinois Move to Restrict Insider Trading in Prediction Markets

New York Governor Kathy Hochul and Illinois Governor JB Pritzker barred state employees from using nonpublic information in prediction markets, while Kalshi fined and banned three congressional candidates for self-betting.

Fact Check
Kalshi's own post, "Enforcement update: Kalshi continues crackdown on political insider trading," is a primary source and directly confirms the core claim: three candidates were found to have traded on their own elections and were fined and suspended for 5 years. The supplied secondary reports from CoinPost and Odaily are consistent with Kalshi's account. The only minor wording issue is that the user title says Kalshi 'bars' them, while the primary source more precisely says '5-year suspension'; substantively, that supports the claim.
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Summary

New York Governor Kathy Hochul signed an executive order banning state employees from using nonpublic information to bet on prediction markets, and Illinois Governor JB Pritzker issued a similar order on Tuesday. At the same time, Kalshi disclosed what it described as its first strict enforcement action against political insider trading on the platform, fining three congressional candidates and imposing five-year bans after determining they traded on their own election outcomes. Mark Moran was fined $6,229 and ordered to return profits, while Matt Klein and Ezekiel Enriquez were fined $540 and $784, respectively. Together, the state actions and Kalshi’s enforcement highlight growing scrutiny of conflicts of interest, nonpublic information, and market integrity in election-related event contracts.

Terms & Concepts
  • Prediction market: A platform where participants buy and sell contracts tied to the outcomes of future events, such as elections or policy decisions.
  • Political insider trading: Trading based on potentially unfair informational advantages tied to political roles, campaigns, or nonpublic election-related knowledge.
  • Nonpublic information: Confidential information not available to the broader market that could affect trading decisions or contract prices.