Gavin Newsom is not a betting man.<\/p>\n
California\u2019s governor on Friday issued an executive order banning insider profiteering by state officials, blocking political appointees from using confidential government information to place bets on prediction markets like Polymarket and Kalshi, the latter of which recently named Donald Trump Jr. as a strategic advisor<\/a>.<\/p>\n Gov. Gavin Newsom signed an executive order banning state officials from making bets with insider information. Anadolu via Getty Images<\/p>\n \u201cPublic service should not be a get-rich-quick scheme,\u201d Newsom said in a statement that took direct aim at the president<\/a>.<\/p>\n The executive order immediately expands existing state ethics rules to cover the online platforms that allow users to wager on real-world events such as military actions<\/a>, elections and economic decisions.<\/p>\n In one case, traders correctly predicted U.S. military actions tied to Iran and Venezuela with near-perfect timing, generating tens of thousands in profits, according to the governor\u2019s office. A Polymarket user is suspected of using 38 accounts to net $2.14 million by correctly betting on a U.S. strike against Iran<\/a>.\u00a0<\/p>\n \u201cAt a time when Trump\u2019s Washington is riddled with ethical failures and insider profiteering,\u201d Newsom said, \u201cCalifornia is drawing a bright line: If you serve the public as a political appointee, you serve the public \u2014 period.\u201d\u00a0<\/p>\n President Trump\u2019s administration has been under scrutiny as online bets have coincided with military strikes. AP<\/p>\n Meanwhile, a separate trader earned about $400,000 by wagering shortly before the capture of Venezuelan leader Nicol\u00e1s Maduro. Others have posted win rates above 90% on Middle East-related events to amass nearly $1 million in gains.<\/p>\n \u201cWe\u2019re not going to tolerate this kind of corruption in California,\u201d said Newsom.<\/p>\n Prediction market bets timed to strikes in Iran have raised concerns of people using confidential information to get rich. via REUTERS<\/p>\n Tarek Mansour, CEO of Kalshi, recently spoked at the FIA Global Cleared Markets Conference in Boca Raton, Florida. REUTERS<\/p>\n California\u2019s governor is widely expected to run for president in 2028 and currently has a 24% chance of becoming the Democratic nominee on Polymarket<\/a>, while Kalshi<\/a> gives Newsom a 27.4% chance.<\/p>\n During a visit to San Francisco on Feb. 19, The Post asked Newsom about his potential run for president and Kalshi pegging the governor as the Democratic frontrunner.<\/p>\n Newsom called the speculation \u201cwildly premature\u201d before pivoting to the issue of prediction markets.<\/p>\n \u201cKalshi is interesting for different reasons,\u201d Newsom said.<\/p>\n \u201cApparently, there was some prediction market [on] how many times I was going to say the word \u2018Trump\u2019 in a speech, and I knew exactly the answer to that \u2014 and I guess legally I could have bet.\u201d<\/p>\n He added, \u201cThat\u2019s an issue you all might want to look at.\u201d<\/p>\n Gov. Gavin Newsom recently acknowledged that he could have gamed prediction markets with a speech. Getty Images<\/p>\n Under the new order, all gubernatorial appointees are prohibited from using nonpublic information obtained through their official duties to profit or to help others profit, including spouses, family members or business associates.<\/p>\n The directive also requires appointees to consult with agency ethics officers or the governor\u2019s legal affairs office if they have questions about compliance.<\/p>\n \t\t\t\t\t\t\tSign up for the California Morning Report newsletter\t\t\t\t\t\t<\/p>\n \n\t\t\t\t\t\t\tCalifornia’s top news, sports and entertainment delivered to your inbox every day.\t\t\t\t\t\t<\/p>\n \t\t\t\t\t\tThanks for signing up!\n\t\t\t\t<\/p>\n The order builds on California\u2019s existing conflict-of-interest laws, including rules under the Political Reform Act that bar officials from using their positions for personal financial gain.\u00a0<\/p>\n But it marks the first time the state has explicitly addressed prediction markets \u2014 a fast-growing industry that has drawn scrutiny from lawmakers and regulators.<\/p>\n In the order\u2019s findings, Newsom cited the \u201cemergence of predictive markets\u201d as creating new risks that government insiders could exploit privileged information for personal enrichment. Congress is now looking at multiple proposals seeking to limit insider trading and market manipulation tied to government actions.<\/p>\n Billionaire Stephen Cloobeck told Politico he tried to place a bet on Rep. Eric Swalwell\u2019s campaign for governor. Los Angeles Times via Getty Images<\/p>\n Rep. Eric Swalwell has received substantial financial support from Stephen Cloobeck in his run for governor. Los Angeles Times via Getty Images<\/p>\n In California, concerns have begun to swirl around the governor\u2019s race.<\/p>\n Stephen Cloobeck, an eccentric billionaire who\u2019s spent more than $1 million backing Rep. Eric Swalwell\u2019s campaign, was recently blocked from placing bets on Kalshi, according to Politico<\/a>.<\/p>\n \u201cWhat did I do wrong? I\u2019m not a candidate, and I\u2019m not part of any campaign. I\u2019m not getting paid by any campaign,\u201d Cloobeck told the outlet. \u201cWhy didn\u2019t they ban me betting against myself?\u201d<\/p>\n Newsom\u2019s order does not create new criminal penalties but reinforces existing prohibitions and makes clear that they apply to this emerging form of betting.<\/p>\n Download The California Post App, follow us on social, and subscribe to our newsletters <\/p>\n California Post News: Facebook<\/a>, Instagram<\/a>, TikTok<\/a>, X<\/a>, YouTube<\/a>, WhatsApp<\/a>, LinkedIn<\/a> \t\t\t\t\t\t
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