By Matthew Holloway |
Gov. Katie Hobbs has signed an executive order prohibiting Arizona executive branch employees from using nonpublic government information to profit through prediction markets.
The governor signed Executive Order 2026-02 last week, directing covered state employees to refrain from disclosing or using information obtained through public service to earn profits, avoid financial losses, or help another person or organization financially benefit from prediction-market transactions.
Violations may result in dismissal, other employment sanctions, or referral to law enforcement, according to the order.
“Arizonans deserve a state government that works for them, not one where insiders exploit public service for their own gain,” Hobbs said. “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.”
Prediction markets allow participants to trade contracts tied to the outcome of future events, including elections, government actions, military operations, weather, sporting events, and economic developments.
The Commodity Futures Trading Commission describes event contracts as swaps that are often structured around yes-or-no outcomes. Their prices reflect market expectations, and contracts typically provide a fixed payout, usually $1, when the selected outcome occurs.
Hobbs’ order designates as confidential any nonpublic information obtained by covered executive branch workers that could be used to profit or avoid a loss through a prediction market.
That provision corresponds with Arizona’s conflict-of-interest law, ARS §38-504(B), which prohibits public officers and employees from using appropriately designated confidential information for personal profit during their government service and for two years afterward. The law also prohibits the unauthorized disclosure or use of information declared confidential by law.
The order covers employees and officers of the Governor’s Office, executive departments, state agencies and offices, and most state boards and commissions.
Its definition excludes agencies headed by a single independently elected state official, the Arizona Corporation Commission, and boards or commissions established by ballot measure during or after the November 1998 general election.
Hobbs encouraged other statewide elected officials, independent boards and commissions, and the legislative and judicial branches to establish comparable policies for their employees.
The order does not create an independent legal claim or remedy and cannot serve as the basis for challenging an action or inaction by a state agency, officer, or employee. It also states that the policy does not alter existing agency powers or override state or federal laws, regulations, or court orders.
The governor cited recent reports and a federal criminal case involving alleged use of government information to place wagers on military operations.
The U.S. Department of Justice announced in April that Army soldier Gannon Ken Van Dyke had been indicted for allegedly using classified information concerning a planned military operation in Venezuela to make wagers on Polymarket.
Federal prosecutors alleged that Van Dyke participated in planning “Operation Absolute Resolve,” a U.S. operation to capture Venezuelan leader Nicolás Maduro, and placed approximately $33,034 in wagers while possessing nonpublic information about the mission.
Van Dyke allegedly profited approximately $409,881 after contracts concerning Maduro’s removal and the presence of U.S. forces in Venezuela resolved in Van Dyke’s favor. Prosecutors charged Van Dyke with violations of the Commodity Exchange Act, wire fraud, and conducting an unlawful monetary transaction. The charges remain allegations, and no conviction was reported in the Justice Department’s announcement.
In March, Arizona Attorney General Kris Mayes filed 20 criminal charges against KalshiEx LLC and Kalshi Trading LLC, the companies behind the Kalshi prediction-market platform. Mayes alleged that the companies operated an unlicensed gambling business and unlawfully accepted wagers on elections.
In May, U.S. District Judge Michael Liburdi granted the Commodity Futures Trading Commission a preliminary injunction barring Arizona from enforcing its gambling laws through criminal or civil actions involving event contracts listed on CFTC-regulated designated contract markets. Liburdi found that the federal government was likely to succeed on its claim that the Commodity Exchange Act preempts Arizona’s gambling laws in that context.
Hobbs’ order took effect immediately upon signing and will remain in force until it is repealed, replaced, or rescinded by a future executive order.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
