Article Summary
- JB Pritzker signed an executive order Tuesday barring state employees and elected officials from using information obtained in their official capacity to place bets on prediction markets.
- The order applies to all employees, officers, appointees and board members of state agencies. Employees are also prohibited from sharing information to help others place bets in the markets.
- Though insider trading is already prohibited under state law, the governor’s office said greater protections are needed to ward off new risks posed by the markets, which have received little regulatory oversight at the federal level.
This summary was written by the reporters and editors who worked on this story.
CHICAGO — Gov. JB Pritzker signed an executive order Tuesday barring state employees from using insider information to place bets on prediction markets like Polymarket and Kalshi.
The apps, which allow users to bet on real world events like the outcome of Illinois’ gubernatorial race or whether the Bears will leave the state by the end of the year have been a source of ire for Pritzker in the state’s tug of war with the Trump administration for regulatory authority.
Though Illinois law already prohibits current and former state employees from using confidential information obtained through their positions for personal gain, the governor’s office said the new order strengthens those protections in response to “emerging risks” posed by the markets amid a rollback in federal oversight.
“Prediction markets have rapidly grown into a space where people can bet on real-world events without any oversight, including events people can influence,” Pritzker said in a statement accompanying the order. “While the Trump administration continues to be riddled with stories of appointees looking to make a profit, Illinois is stepping up to ensure those who are serving the public not their own personal financial gain.”
The statement pointed to profitable bets placed before the announcement of U.S. military actions, suggesting that they may have been informed by insider information. Examples include “highly accurate” bets placed ahead of U.S.-Israel strikes on Iran and a wager favoring the removal of then-Venezuelan President Nicolás Maduro hours before the U.S. operation was publicly announced.
President Donald Trump, his family and business associates have been widely criticized for making millions, sometimes hundreds of millions, for making bets in the unregulated prediction markets shortly before Trump announcements.
The order, which takes effect immediately, also prohibits state employees from sharing insider information to help others make bets on prediction markets. The order applies to all employees, officers, appointees and board members of state agencies.
Jurisdictional tug of war
Since last April, the Illinois Gaming Board has sent cease and desist letters to over a dozen online gaming operators, including Polymarket, Kalshi, Robinhood and Crypto.com, claiming that they offered illegal gambling in violation of state law.
The federal Commodities Futures Trading Commission struck back earlier this month, suing Illinois, seeking to block its attempt to regulate the markets. In its complaint, the CFTC argued that prediction markets are not a form of gambling, but rather commodities markets like those for grain futures.
READ MORE: Trump administration sues Illinois over state’s attempts to regulate prediction markets | Illinois regulators say prediction markets are illegal gambling, but bettors — and the Trump family — love them
It said the federal government has exclusive regulatory authority over those markets as established under the Commodity Exchange Act.
But the governor’s office said that prohibiting states from regulating prediction markets comes with the risk of eroding public trust.
“Such efforts would limit states’ ability to enforce consumer protections, establish guardrails and prevent individuals from profiting off insider information in an industry that currently operates with little to no comprehensive regulation,” the office said.
“Illinois maintains that states must retain the ability to protect consumers, uphold ethical standards, and ensure that new forms of wagering do not undermine public trust.”
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
This article first appeared on Capitol News Illinois and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
