California Governor Gavin Newsom just signed an executive order that bans appointed state officials with insider information from betting on prediction markets. This order expands existing ethics rules to ensure state appointees can’t use nonpublic information to get rich, or help their family members get rich, through these kinds of bets.
Newsom’s office first teased the announcement on X, jokingly asking popular prediction market platforms like Kalshi and Polymarket to “get odds for this.” Per Politico, Newsom then took a not-so-subtle jab at Trump in a statement, “At a time when President Trump’s Washington is riddled with ethical failures and insider profiteering, California is drawing a bright line.”
For those unfamiliar, prediction markets are these fast-growing online platforms where you can bet on all sorts of outcomes, from sports to pop culture, horrendous events like the kidnapping of Nancy Guthrie, and even state politics. Lately, they’ve attracted scrutiny from lawmakers across the political spectrum who are worried about rampant insider trading and the potential for these sites to become addictive for kids.
Some of the things they bet on as insane
There was even an unusual situation where someone apparently predicted events related to the U.S.’s military intervention in Venezuela and a strike on Iran. Those wagers sparked accusations of insider knowledge and led to new legislation introduced in both houses of Congress just last week, aiming to ban bets on terrorism, war, and other sensitive events.
Adding to the controversy, Newsom and other Democrats have previously pointed out the ties between prediction market platforms and the Trump family. Donald Trump Jr. actually advises both Kalshi and Polymarket.
Kalshi responded to the governor’s office with a sassy tweet, posting that “the odds are 100%” that the platform already “bans insiders.” In fact, many prediction market companies claim that the regulatory push isn’t needed since they already have rules to prevent insider trading.
After Newsom signed his order, Kalshi commented that the policy makes sense. Polymarket updated its insider trading guidelines this week, and Kalshi announced new technological safeguards to try to block political candidates from betting on their own campaigns, along with similar restrictions for sports.
This whole issue has also captured the attention of other lawmakers and Congress. A bipartisan proposal introduced in the House this week would prohibit members of Congress, the president, and other D.C. officials from participating in prediction markets related to political events or policy decisions.
The Trump administration, for its part, insists that the federal Commodity Futures Trading Commission has sole authority over prediction markets and has vowed to fight state regulators in court.
In California, the 2026 governor’s race has been a hot topic with users on Kalshi and Polymarket, betting more than $10 million combined on the outcome. However, the funniest impact of a prediction market took place in Israel recently, when a reporter was asked to amend their reporting of the facts to help a bet.
Published: Mar 28, 2026 07:00 am