New York Governor Kathy Hochul signed an executive order banning state employees from using insider information to bet on prediction markets.

In an executive order signed on Wednesday, Hochul cited the "recent proliferation of prediction markets."

"No officer or employee of a state agency who serves at the pleasure of the Governor or their appointing authority, and no member of a public authority appointed by the Governor, may use any nonpublic information obtained in the course of their official duties to seek profit or avoid loss from participation in a prediction market or similar service or assist any other person in seeking profit or avoiding loss from participation in a prediction market or similar service," according to the executive order. 

On Tuesday, Illinois Governor JB Pritzker issued a similar executive order blocking state employees from using information that is not public to place bets on prediction markets. 

Prediction markets, such as Kalshi and Polymarket, have swiftly gained popularity following the 2024 election season, where people can place bets on areas like sports, political outcomes and military operations, among other markets. The regulation of those prediction markets has become a major point of contention. 

The federal Commodity Futures Trading Commission Chair Michael Selig has said his agency has "exclusive jurisdiction" over prediction markets and went so far as to sue Illinois, Arizona and Connecticut earlier this month over their actions to shut down what the agency calls "federally regulated designated contract markets." 

However, states have asserted that platforms are violating local gaming and gambling laws, particularly related to sports-related bets. On Tuesday, New York Attorney General Letitia James sued Coinbase and Gemini for allegedly illegally offering people the ability to bet on events such as sports and elections. James called the two companies' prediction markets "illegal gambling operations."

Insider trading in particular has come into focus for lawmakers in Washington. In January, lawmakers raised alarm bells after a Polymarket account wagered that Venezuelan President Maduro would be "out" by the end of this month, netting $400,000, sparking concerns of inside information.

Then, Democratic Rep. Ritchie Torres introduced a bill to ban federal elected officials, political appointees, and executive branch employees from making bets on prediction markets involving "government policy, government action or political outcome."

'I wanted to get caught'

Kalshi has said it's taken steps to weed out insider trading and has publicly disclosed cases over the past few months.

On Wednesday, the prediction markets platform said it opened three insider cases involving candidates and fined and suspended them for making bets on their own races. Those candidates include Matt Klein, a Minnesota state senator who is running for a spot in the U.S. House of Representatives and Ezekiel Enriquez, who also ran for the U.S. House of Representatives in Texas.

"Regardless of the size of a trade, political candidates who can influence a market based on whether they stay in or out of a race violate our rules," the company said on Wednesday in a statement. "No matter how small the size of the trade, any trade that is found to have violated our exchange rules will be punished."

The last candidate fined by Kalshi is Mark Moran, who is running in the Democratic primary for Virginia's U.S. Senate seat. 

On X, Moran said he "wanted to get caught."

"I traded $100 on myself, knowing this would happen (also knowing that I wouldn’t be vying for the democratic nomination) and the attention it would create to highlight how this company is destroying young men and as Senator I will go after Kalshi and impose significant penalties on them - 25% - a vice tax - to pay down our national debt," Moran said on Wednesday. 

Kalshi declined to comment.

Updated at 8:25 p.m. UTC on April 22 to include Illinois