Highlights

Arizona Gov. Katie Hobbs signed an executive order July 9 prohibiting state executive branch employees from using nonpublic government information to profit on prediction markets, joining six other governors who have moved to close an ethics gap that federal investigators are now scrutinizing at the White House level.

The order covers the governors of California, Illinois, Maryland, New York, North Carolina, and Wisconsin. Hobbs's order states: "All Arizona State executive branch employees are strictly prohibited from disclosing or using any nonpublic information obtained due to their public service to personally profit from, avoid loss from, or assist another person or entity, in profiting or avoiding loss from participation in prediction markets."

The orders arrived before Commodity Futures Trading Commission investigators reportedly began examining Gabriel Perez, President Donald Trump's teleprompter operator for the past decade, for allegedly using advance knowledge of presidential remarks to win more than $100,000 on Kalshi. White House Press Secretary Karoline Leavitt said Perez was placed on unpaid administrative leave. The White House had issued a memo in March warning staff against using nonpublic government information to place wagers.

The backdrop that prompted most of the governors to act: a Polymarket user appeared to win more than $400,000 in January by betting the United States would invade Venezuela by Jan. 31. The site refused to pay out, ruling the special operation did not constitute an invasion. Federal authorities in April arrested a special operations soldier connected to the capture of Venezuelan President Nicolas Maduro as the account holder. Govs. Gavin Newsom, Kathy Hochul, Wes Moore, Tony Evers, and Hobbs all cited that incident in their executive orders.

California's Newsom acted first, in March, expanding an existing statewide insider trading ban for elected officials to cover prediction markets. "Public service should not be a get-rich-quick scheme," Newsom said in a statement at the time.

Arizona's legal entanglement with Kalshi predates the executive order. The Arizona Gaming Commission sent Kalshi a cease-and-desist order roughly a year before the state filed a 20-count criminal indictment against the platform on March 17, alleging it was "operating an illegal gambling business" by accepting sports wagers and election bets. It was the first criminal indictment a state had filed against Kalshi for violating state gaming laws. The CFTC responded by suing Arizona, arguing federal preemption; a federal judge in May sided with the CFTC and permanently blocked the state's criminal case.

Kalshi separately suspended three congressional candidates in April who allegedly bet on their own races, fining and banning them from the platform for five years. The company had previously fined and banned a long-shot California gubernatorial candidate in February for the same conduct.

Does the ban cover all Arizona state employees?

No. According to a KOLD report on the Hobbs order, the ban does not apply to agencies led by elected state officials, the Corporation Commission, legislative staff, or the judicial branch. Arizona Supreme Court Chief Justice Ann Timmer confirmed Tuesday in a press release that an equivalent policy is already in place for judiciary employees.

North Carolina is the one state among the seven where no prediction market litigation is pending; its legislature passed a provision in Senate Bill 257 formally authorizing prediction markets in the state, making it the first to do so by statute.

The CFTC's investigation into the Perez matter is ongoing.

Sources

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  1. azcapitoltimes.com retrieved 22/07/2026 20:47

Authored by The Scottsdale Signal. Drafted by AI from primary-source material under our beat-specific editorial guides; reviewed by humans before publish under our five-gate process. Sources retrieved at 22/07/2026 20:47. Every claim traces to a source.