California Governor Gavin Newsom signed an executive order Friday prohibiting gubernatorial appointees from using nonpublic information to profit on prediction markets. The order addresses gaps in state ethics laws and responds to concerns about platforms like Kalshi and Polymarket being exploited by insiders.

These betting platforms allow users to wager on outcomes ranging from sports and politics to cultural events. Newsom's order aims to prevent officials with privileged information or the ability to influence events from capitalizing on their positions through prediction market trades.

The executive action follows reports of well-timed prediction-market wagers on world events, raising alarms about potential conflicts of interest. By closing these loopholes, California joins other states taking steps to regulate the growing prediction market industry and maintain public trust in government decision-making.