Gavin Newsom has stuck his finger into the wind and realized the political gusts are blowing in the direction of a massive crackdown on corruption
Newsom signed an executive order Friday that bans state officials from using insider information to place bets on prediction market platforms, which include Polymarket and Kalshi. Although these are practically gambling venues, they are technically different than DraftKings or FanDuel because they allow users to trade “contracts” on future events outside sports, such as if/when the United States puts boots on the ground in Iran. As a Polymarket user, you aren’t betting against the house; you’re trading against the market — against other traders. (RELATED: CNN Just Cracked Open Pandora’s Box That’s Worse Than Any Fake News Hoax)
“At a time when Trump’s Washington is riddled with ethical failures and insider profiteering, California is drawing a bright line,” he said in a statement. “We’re not going to tolerate this kind of corruption in California.”
The administration faced insider trading accusations due to a massive, suspiciously timed oil trades right before President Trump said Monday there were “productive conversations” ongoing between the U.S. and Iran. This is the sort of news that drives down oil prices because it suggests a ceasefire is on the horizon. The trades were collectively worth $580 million.
Will @CAGovernor Gavin Newsom ban CA officials & appointees from betting on predictive markets with insider info in the next 24 hours??
Can we get odds for this? 👀 @Polymarket @Kalshi
— Governor Newsom Press Office (@GovPressOffice) March 26, 2026
Since prediction markets are fairly new, it has taken some time for state governments and regulators to catch up. Meaning, as of now, prediction markets are still very much an insider trader’s perfect dream. That being said, both Polymarket and Kalshi have updated their policies to curb insider trading.
In general, anti-corruption politics seems to be a huge bipartisan winner. For example, literally no American — save for those who profit off corruption — believes that members of Congress should be allowed to trade stocks while in office. They’ll likely feel the same about banning government officials from using prediction market platforms. (RELATED: What’s So Special About Nancy Pelosi’s Stock Trading Activities?)
Like Newsom, a group of bipartisan senators has already made moves to get ahead of the issue.
Democratic Sens. Elissa Slotkin and Adam Schiff of California, and Republican Sens. Todd Young of Indiana and John Curtis of Utah, introduced the Public Integrity in Financial Markets Act of 2026 on Thursday. The proposed ban would apply to the president, vice president, members of Congress and their staff, in addition to political appointees and personnel at executive and independent regulatory agencies. It also defines insider information as non-public data that “a reasonable investor would consider important” when deciding on a trade, according to Politico.
Young said that recent prediction market trades have “raised real concerns that individuals with access to sensitive, nonpublic information could exploit that advantage for financial gain.”
“This is a sensible step to protect taxpayers and promote integrity in government,” the Indiana senator said.
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