Governor Katie Hobbs (D-AZ) has issued an executive order (EO) prohibiting public officials from using nonpublic government information to profit on prediction markets and gambling websites.
The Precedent
In March, Arizona Attorney General Kris Mayes filed criminal charges against the prediction market website Kalshi, accusing it of operating an illegal gambling operation.
Kalshi posts wagers on Arizona elections (which is illegal in the state), and it is not licensed to operate in the Grand Canyon State.
Moreover, Kalshi came under fire nationally when a Polymarket user named "Magamyman" won a $553,000 bet that the United States would strike Iran and kill Supreme Leader Ayatollah Khamenei, with allegations that the winner was a White House insider.
As a result, Representative Yassamin Ansari (D-AZ) introduced the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act, which prohibits anyone who feasibly controls and likely knows the outcome of such an event from placing a bet on it on such platforms.
In April, the federal government stepped in on the side of Kalshi and Polymarket against Arizona by suing the state, along with Connecticut and Illinois.
What Hobbs is Saying
Nevertheless, Gov. Hobbs issued an executive order prohibiting public officials from using nonpublic government information on these platforms, stating in her press release that "Arizonans deserve a state government that works for them, not one where insiders exploit public service for their own gain."
"I'm proud to set clear, commonsense ethical standards on prediction markets to hold our government accountable," Gov. Hobbs continued, adding, "Public service is a privilege, and we will not tolerate anybody abusing that privilege to line their own pockets."
Violations under this EO include dismissal, other sanctions, and referral to law enforcement. Moreover, the order officially designates all nonpublic information obtained during public service that could be used for wagers as confidential.
