Executive Order Banning Insider Betting by State Officials

CA Governor Executive Orders

Published March 27th, 2026

Detected March 28th, 2026

Summary

California Governor Gavin Newsom issued an executive order strengthening bans on state officials using non-public information for personal profit, specifically targeting prediction markets. The order extends prohibitions to appointees and their associates, aiming to prevent corruption fueled by insider knowledge, particularly in light of federal examples.

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What changed

Governor Newsom has issued an executive order that expands existing statewide bans on state officials using insider knowledge for personal gain. This order explicitly includes prediction markets, which allow individuals to bet on real-world events, and extends the prohibitions to gubernatorial appointees and their associates (spouses, children, family members, business partners, etc.). The action is framed as a response to reports of insider profiteering within the federal government, particularly concerning bets placed on government actions and military operations.

The practical implication for California state appointees is a reinforced prohibition against leveraging confidential or non-public information obtained through their official roles for any profit, directly or indirectly. This requires a review of current practices and potential personal financial activities related to prediction markets or similar platforms. While the document does not specify a compliance deadline, the effective date of the executive order implies immediate adherence is expected for all gubernatorial appointees.

What to do next

Review existing personal financial activities related to prediction markets.
Ensure no non-public information is used for personal or third-party profit in prediction markets.
Familiarize all gubernatorial appointees with the expanded prohibitions outlined in the executive order.

Source document (simplified)

News

Mar 27, 2026

Governor Newsom strengthens bans on insider betting by state officials, takes aim at corruption fueled by Trump

What you need to know: Governor Newsom today issued an executive order strengthening prohibitions against using non-public information to profit personally, explicitly cracking down on the potential use of prediction markets by state employees in the Newsom Administration.

SACRAMENTO – Governor Gavin Newsom today issued an executive order expanding on statewide bans preventing California state officials from using insider knowledge to profit, or assist another person in profiting, to apply to prediction markets — an emerging financial industry that allows users to bet on real-world events, including government actions, wars, and economic decisions. The ban further extends these prohibitions to prevent appointees from using insider information to help others, including spouses, children, other family members, business partners, or others, profit from such information.

“Public service should not be a get-rich-quick scheme. 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.”

Governor Gavin Newsom

The order comes amid mounting reports suggesting that individuals in the federal government with access to sensitive government information are cashing in, placing well-timed bets ahead of major Trump administration actions and walking away with profits. Recent reporting has raised serious questions about trades placed just before key federal decisions — from military operations to tariff moves — fueling concerns that insiders in President Donald Trump’s orbit are exploiting confidential information for their own personal gain or to help others profit off their knowledge.

In one example, an individual precisely predicted multiple events related to the United States’ military intervention in Venezuela, war with Iran, and military operations targeting drug cartels — an extremely unlikely outcome for someone without insider knowledge — and pocketed tens of thousands of dollars in profit in the process.
In another example, six suspected insiders made $1.2 million betting on a U.S. strike against Iran, from accounts that had been funded only days before the strike, specifically bought for the day of the strike, and bet only hours before.
Another person betting has a 93% win rate for bets related to Iran and Israel – making nearly $1 million since 2024.
An unidentified trader bet tens of thousands of dollars just hours before the U.S. Military captured Venezuela’s president, Nicolás Maduro, making $410,000 on the bet and creating speculation that it came from a government official. California already has some of the strongest ethics laws in the nation, including strict conflict-of-interest rules and prohibitions on using public office for private gain. This executive order reinforces those protections by explicitly banning gubernatorial appointees from using non-public information for profit in prediction markets.

Under the order all gubernatorial appointees are prohibited from using confidential or non-public information obtained through their official roles to profit — or help others profit — from prediction markets.

The order takes effect immediately. A copy of the order can be viewed here.

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