Arizona Governor Katie Hobbs signed an executive order that bars state executive employees from using nonpublic government information to profit through prediction markets.
The order, designated Executive Order 2026-02 and signed on July 9, prohibits employees from using or disclosing such information to earn money, avoid financial loss, or assist others in prediction‑market transactions. Violations may result in dismissal, disciplinary measures, and referral to law‑enforcement authorities.
The governor explained that the measure strengthens ethical standards as prediction markets expand in popularity and scope.
She emphasized that public service is a privilege and that the state will not tolerate insiders exploiting their positions for personal gain.
The order references existing Arizona statutes that already forbid public officials from using confidential information, noting that prediction markets—trading contracts tied to elections, government actions, military operations, weather events, wildfires, sports and other real‑world outcomes—create new opportunities for misuse.
Using privileged information for profit, the order warns, erodes public confidence in government institutions.
Recent federal indictments involving government employees who leveraged classified data to win millions of dollars in prediction‑market wagers on military actions underscore the national‑security risks and the need for stronger safeguards.
To reinforce trust, the order formally designates any nonpublic information that could be used for profit in prediction markets as confidential.
Similar policies have been adopted in other states, reflecting growing concern over the ethical challenges posed by event‑based trading platforms.
The measure comes amid ongoing legal scrutiny of prediction markets; a recent federal court decision allowed a market operator to continue offering contracts in Arizona while related litigation proceeds.
The policy applies to employees and officers in the Governor’s Office, executive departments, agencies, and most state boards and commissions, with limited exceptions for independently elected agencies and certain boards created after the 1998 general election.
The order encourages other statewide elected officials, independent boards, as well as the judicial and legislative branches, to adopt comparable standards. It takes effect immediately and will remain in force until modified or repealed by a future executive order.
