New York and Maryland become latest states to ban public workers from using prediction markets

Last week, New York and Maryland became the latest states to ban employees from using prediction betting sites as more public and private employers become concerned about insider trading.

New York Governor Kathy Hochul signed an executive order on April 22 prohibiting state employees from betting on real-life events through prediction market platforms. It also prohibits employees from helping others use prediction betting to profit off events. The rule is being added to the existing code of ethics materials for state employees, according to the order.

Days later, on April 24, Maryland Governor Wes Moore signed a similar order, stating employees cannot use “nonpublic government information for prediction market bets,” CBS News reported. Workers who violate the order will be reported to the attorney general’s office and could receive disciplinary action.

“The citizens of Maryland deserve a government where state business is conducted truthfully and honestly, free from the existence or perception of any corruption or misconduct,” Moore said in the order.

Hochul echoed similar sentiments in her remarks about the betting sites. “Getting rich by betting on inside information is corruption, plain and simple,” she said in prepared remarks. “Our actions will ensure that public servants work for the people they represent, not their own personal enrichment.”

The news came the same week that a US special forces soldier was charged with unlawful use of confidential government information for personal gain, among other charges, for bets he made about the ouster of Venezuelan President Nicolas Maduro. The soldier, involved with the logistics to remove Maduro, made over $409,000 on the bet. Events state employees are prohibited from betting on include military activity, natural disasters, or even the attire of public officials.

New York and Maryland aren’t the only states taking steps to limit prediction market betting. Illinois and California also built similar ethics provisions into employee conduct rules this year, Business Insider reported.

Some lawmakers want the industry to be more regulated, like other forms gambling.

“If you want to run what is, in substance, a gambling platform in this state, you get a license,” New York Assemblymember Clyde Vanel said of his proposal to rein in prediction markets. “Prediction markets have rebranded old-fashioned wagering as ‘trading.’”

Bigger problems loom. The two largest prediction markets, Kalshi and Polymarket, have made it easy for people to gamble on nearly anything, potentially putting public and private employers at risk.

For their part, both companies say that insider trading violates their rules. “This makes sense, and we already do this. At Kalshi, insider trading violates our rules, and we enforce them when we catch insiders,” Elisabeth Diana, a spokesperson for Kalshi, told Wired.

Roughly one in five people in the US say they have placed a bet on a prediction market, according to a new survey from Scripps News and Talker Research. Mental health practitioners warn that there is an increased risk of gambling addiction as prediction market sites become more popular—especially young men who are the most likely to use the sites, according to Fortune.

“You regulate the distribution, the speed, the type, the access to the product, because the product is what’s dangerous,” Harry Levant, director of gambling policy at the Public Health Advocacy Institute, told the Guardian.

In March, Beast Industries, the company owned by influencer Jimmy Donaldson (MrBeast), fired an employee who Kalshi accused of making insider trading bets related to MrBeast videos, Newsweek reported. The employee engaged in the behavior, despite warnings all employees received several months prior, according to the AP.

Beast Industries had tried to get ahead of potential insider trading with employees, a spokesperson told Newsweek. “We have a longstanding policy in place against employees using proprietary company information, which safeguards the highest standards and ethics throughout our organization.”