Hobbs bars Arizona state employees from using government info to bet on prediction markets

Gov. Katie Hobbs issued an executive order Thursday prohibiting state employees from using nonpublic government information to make bets on prediction markets in light of revelations that classified military information has been used to do so in other parts of the country. 

Prediction markets are open markets that enable the prediction of specific outcomes using financial incentives, though in practice, they function largely as forums for people to be on practically anything, from the winner of a basketball game to where missiles will land in war zones. 

The executive order strictly prohibits executive branch employees in Arizona from disclosing or using any nonpublic information to profit or avoid losing in a prediction market. Violations “may result in a dismissal or other appropriate sanctions and may be referred to law enforcement.” 

The order encourages statewide elected officials, boards and commissions, as well as the judicial and legislative branches — all of which are not under Hobbs’ control — to adopt similar policies. 

“Arizonans deserve a state government that works for them, not one where insiders exploit public service for their own gain,” the governor said in a statement announcing the order. “I’m proud to set clear, commonsense ethical standards on prediction markets to hold our government accountable. Public service is a privilege, and we will not tolerate anybody abusing that privilege to line their own pockets.”

Arizona has taken center stage in a fight against one of the largest prediction market companies, Kalshi. 

Attorney General Kris Mayes pursued criminal charges against Kalshi, accusing it of breaking Arizona laws prohibiting the operation of an unlicensed wagering business and betting on Arizona elections. 

Some of the bets Mayes’ singled out include betting on the 2028 Presidential election results, if Republican Andy Biggs would win the Arizona governors race, if Elon Musk would attend the Super Bowl and if a Democrat would win the Arizona Secretary of State race. Mayes’ charges focused primarily on Arizona sports and election bets, though some charges include federal election bets, as well as sports contests in other states.

That case was permanently blocked in federal court after a judge determined that federal law preempted the state’s authority to regulate Kalshi because they are exclusively regulated by the Commodity Futures Trading Commission.