Arizona Governor Katie Hobbs has signed an executive order aimed at strengthening ethical standards among state executive branch employees. The order prohibits employees from using nonpublic government information to profit through prediction markets, which allow users to trade contracts tied to real-world events. This move is intended to prevent insider trading and promote transparency in government. By doing so, the governor seeks to maintain public trust in the state government.
The executive order, signed on July 9, explicitly forbids state executive branch employees from disclosing or using any nonpublic information to earn money, avoid financial losses, or assist others in profiting from prediction markets. Employees who violate this policy may face dismissal or other disciplinary action, and could also be referred to law enforcement. This measure demonstrates the state's commitment to holding its employees to high ethical standards.
According to the governor, the order is a necessary step in ensuring that state government works for the people, rather than allowing insiders to exploit their positions for personal gain. The governor emphasized that public service is a privilege and that abusing this privilege for financial gain will not be tolerated. By setting clear ethical standards, the state aims to prevent the misuse of confidential information and maintain public confidence in government.
The proliferation of prediction markets has created new opportunities for insiders to misuse privileged information, prompting the need for stronger safeguards. Recent federal indictments have alleged that government employees used confidential information to win millions of dollars through prediction market wagers, highlighting the risks associated with these platforms. The Arizona executive order acknowledges these risks and takes steps to address them.
The order also designates as confidential any nonpublic information obtained by Arizona executive branch employees that could be used to generate profits or avoid losses through prediction market transactions. This move is intended to reinforce public trust in state government and prevent the exploitation of sensitive information. By taking this step, Arizona joins other states, such as New York, in addressing the ethics challenges posed by expanding event-based trading platforms.
The new policy applies to employees and officers in the Governor's Office, executive departments, agencies, and most state boards and commissions. While some exceptions apply, the order encourages other statewide elected officials, independent boards, and commissions, as well as the judicial and legislative branches, to adopt similar standards. The order took effect immediately and will remain in force until repealed, replaced, or rescinded by a future executive order.
