Hochul bans NYS workers from using inside information on prediction apps like Kalshi, Polymarket

ALBANY — Gov. Kathy Hochul signed an order Wednesday banning New York State employees from using insider information to profit in rapidly expanding prediction markets, such as Kalshi and Polymarket.

Far from limiting themselves to sporting events, prediction markets are offering bets on things such as whether Iran’s leader would be removed from power.

That includes state-level events that outwardly would seem to entice few, such as recent offerings on Kalshi: "What will Kathy Hochul say in her next announcement?" and "Will Zohran Mamdani sign an executive order this week?" referring to the New York City mayor.

The surge in offerings has sparked a reaction, with New York becoming the eighth state to restrict or regulate prediction market betting by state employees. Part of the concern is that state employees might profit off events they know about ahead of time or even have a hand in shaping.

"Our actions will ensure that public servants work for the people they represent, not their own personal enrichment," Hochul said.

The governor said New York was taking action while the Trump administration has turned a “blind eye” to the ethical issues created by an unregulated predictions market.

Democratic New York Sen. Kirsten Gillibrand is proposing a law to ban high-ranking officials from trading on government decisions and events.

Earlier this month, The Associated Press reported that groups of anonymous traders made strategic, well-timed bets on a major geopolitical event hours before it occurred. The AP reported that at least 50 brand new accounts on Polymarket placed substantial bets on a U.S.-Iran ceasefire in the hours, even minutes, before President Donald Trump announced the ceasefire.

It’s also been widely reported that Donald Trump Jr. has ties to Kalshi and Polymarket.

Besides New York, California, Illinois, Nevada, Connecticut, Arizona, Utah and Tennessee have taken action against prediction market companies.

Already, the Trump administration has sued to try to prevent Arizona, Connecticut and Illinois from regulating the companies.

Separately, New York has taken other action specifically against Kalshi.

In October, the state Gaming Commission sent Kalshi a "cease and desist" letter for illegally operating an unlicensed mobile sports wagering platform in New York State. Kalshi responded by suing New York, claiming states are preempted by federal law from regulating prediction markets.

Also in New York this week, Attorney General Letitia James on Tuesday sued two other prediction markets, Coinbase Financial Markets, Inc. and Gemini Titan LLC, claiming they were violating state anti-gambling laws.

By Yancey Roy

yancey.roy@newsday.com@yanceyroy