New York and Illinois became the latest states to ban government employees from using insider information on prediction markets this week, as the United States rushes to adapt to risks posed by the novel trading platforms.
On Wednesday, New York Governor Kathy Hochul signed an executive order banning all state employees from using nonpublic information obtained in their job to make wagers on prediction markets. A near-identical executive order was signed Tuesday by Illinois Governor J.B. Pritzker, applying to state employees under his jurisdiction.
“Despite the proliferation of wagering opportunities now facilitated by these companies, federal regulators have not to date required any meaningful ethical standards relating to conduct on these markets, including protections against insider trading,” Hochul wrote.
“Nor,” she continued, “have they undertaken any meaningful enforcement actions to prevent insider trading, but they have instead focused on precluding states from exercising oversight authority over the gambling undertaken on these platforms.”
