California bans state officials from prediction markets betting

Lia Russell, The Sacramento Bee on Mar 27, 2026

By clicking submit, I authorize Arcamax and its affiliates to: (1) use, sell, and share my information for marketing purposes, including cross-context behavioral advertising, as described in our Privacy Policy , (2) add to information that I provide with other information like interests inferred from web page views, or data lawfully obtained from data brokers, such as past purchase or location data, or publicly available data, (3) contact me or enable others to contact me by email or other means with offers for different types of goods and services, and (4) retain my information while I am engaging with marketing messages that I receive and for a reasonable amount of time thereafter. I understand I can opt out at any time through an email that I receive, or by clicking here

SACRAMENTO, Calif. — California banned state officials from making bets on prediction markets like Kalshi and Polymarket after Gov. Gavin Newsom signed an executive order Friday.

The executive order, which took effect immediately, bars government appointees and their family members (including spouses and children) and their business partners from using insider state information to enrich themselves by betting on outcomes of current affairs, sports and other ventures.

Prediction markets allow people to trade on the outcomes of real-world events; Kalshi and Polymarket, which uses cryptocurrency, are the two largest markets and are regulated under the U.S. Commodity Futures Trading Commission.

In January, an anonymous gambler made nearly $500,000 via Polymarket by betting that the Trump administration would take Venezuelan President Nicolás Maduro into custody, which U.S. authorities did hours later, raising concerns that the gambler had made their wagers using inside information. Polymarket refused to pay out successful predictors. More recently, Kalshi users sued the platform in California earlier this month after the market refused to pay out winners who had successfully predicted the death of Iranian cleric Ayatollah Ruhollah Khomeini, citing policy banning betting on deaths.

Congressional Democrats introduced legislation that would ban government insiders from using insider information to place bets related to “government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome.”

Newsom, who has beaten a steady drum criticizing federal officials who have profited from their access to the White House, took a shot at the Trump administration in a statement announcing his directive.

“Public service should not be a get-rich-quick scheme,” he said. “At a time when Trump’s Washington is riddled with ethical failures and insider profiteering, California is drawing a bright line: If you serve the public as a political appointee, you serve the public — period. We’re not going to tolerate this kind of corruption in California.”

His office teased the announcement Thursday in an X post, tagging both Polymarket and Kalshi: “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?”

Kalshi responded that it already banned insiders: “The odds are 100% Governor.”

Polymarket did not immediately respond to a request for comment. Earlier this week, it announced it had tightened its internal policies to ban bets placed by people with positions of influence over the outcome, or using stolen confidential information or illegal tips.

Prediction market betting has come up in the governor’s race to succeed Newsom, who is termed out of office and cannot run again after this year. Users on Polymarket and Kalshi had placed bets totaling about $11 million as of Friday morning towards predicting who will win.

Billionaire hotel magnate Stephen Cloobeck complained earlier this year that Kalshi blocked him from betting on the success of his friend and beneficiary, Rep. Eric Swalwell, who is in a dead heat with former Rep. Katie Porter and billionaire climate change activist Tom Steyer for the primary.

____