Key Takeaways:
- Illinois EO 2026-04 bars state employees from insider wagers on Kalshi, Polymarket, Crypto.com.
- Illinois Gaming Board has issued cease-and-desists to 12+ prediction market operators since April 2025.
- CFTC sued Illinois on April 2 to assert exclusive federal jurisdiction over event contracts.
A widening state response to federal preemption
Illinois law already bars current and former state officials from knowingly using confidential information obtained by virtue of their office for personal gain, but Pritzker’s office said the new order strengthens those protections in response to emerging risks tied to the rapid growth of event-based gambling. Pritzker signed Executive Order 2026-04 on Tuesday, April 21, effective immediately: its prohibitions apply regardless of whether the state employee or any other person ultimately profits.
Pritzker framed the executive order as a direct response to what his office described as a rollback in federal oversight under the Trump administration. “ Prediction markets have rapidly grown into a space where people can bet on real-world events without any oversight, including events people can influence,” Pritzker said in the statement.
The governor’s office cited several insider-trading concerns as justification, including newly created accounts that placed large, highly accurate bets shortly before the February 2026 U.S.-Israel strikes on Iran; an anonymous trader who earned more than $400,000 betting on the capture of Venezuelan President Nicolás Maduro, with many wagers placed just hours before the U.S. operation was publicly announced; and a surge of bets on Taylor Swift’s engagement shortly before the announcement was made public.
The order arrives amid active litigation. On April 2, the CFTC filed lawsuits in federal court against Illinois, Arizona, and Connecticut, seeking declaratory judgments that federal law grants the commission exclusive authority to regulate event contracts, and requesting injunctions preventing those states from enforcing state gambling laws against CFTC-registered designated contract markets. Since April 2025, the Illinois Gaming Board has issued cease-and-desist letters to more than a dozen operators – including Polymarket, Kalshi, Robinhood, and Crypto.com – alleging they were offering illegal gambling in violation of state law.
Illinois joins a growing list of states that have moved against prediction market insider trading. California Governor Gavin Newsom signed a similar executive order on March 27, expanding California’s existing conflict-of-interest rules to explicitly prohibit gubernatorial appointees, as well as their spouses, family members, and former business partners, from using confidential information to profit from prediction markets. Nevada, Utah, and Tennessee have also taken state-level action, as courts across multiple states weigh the preemption question.
Pritzker’s executive order took effect immediately and applies across all Illinois state agencies.
