Election officials are banning employees from betting on prediction markets before the midterms

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Officials in Maricopa County, Arizona, and Delaware County, Pennsylvania, say the bans guard against insider trading and protect public trust in elections

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As the midterms approach in under two months, election and county officials have moved to prohibiting employees from trading on prediction market contracts linked to races on the ballot, according to CNBC. Officials say the bans are the most direct tool they have to stop employees, who handle ballot materials, from profiting on insider knowledge through these markets.

The Maricopa County resolution, adopted this July, covers roughly 13,000 county employees and extends to event contracts across several domains, from weather forecasts and court proceedings to election outcomes. Thomas Galvin, a supervisor for Maricopa County who helps oversee voter tabulation and Election Day voting, said the measure signals a commitment to transparent elections. "When we implement a policy for our employees not to trade or bet on non-public information, that goes a long way towards showing people that not only are we working hard to maintain transparent elections, but also shows that we are being very aware of new technology," Galvin said.

Arizona Governor Katie Hobbs had already signed an executive order restricting state employees from using nonpublic information to trade on prediction markets, and the Maricopa resolution built on that foundation.

In Delaware County, Pennsylvania, just outside Philadelphia, the elections office updated the employee oath it already maintained against wagering on elections to explicitly include prediction market contracts, bringing roughly 2,200 workers under the prohibition. James Allen, Delaware County's elections director, said the office concluded that prediction markets constitute gambling. "I don't want these prediction markets to infect our elections here in Delaware County," Allen said. "They're definitely the newest and most existential threat to undermining faith in the elections."

Officials also cited public confusion between prediction market odds and traditional polling as a driving concern. Galvin noted that voters in his district have mistaken prediction market probabilities for poll results. "Just because someone has a 98% chance of winning on a prediction market doesn't mean that they're winning in the polls 98 to 2," he said.

That confusion has had real consequences. Dean Logan, registrar-recorder/county clerk for Los Angeles County, said at a July webinar hosted by the Partnership for Large Election Jurisdictions that early vote counts in a Los Angeles race diverged from prediction market expectations, generating threats and heightened aggression from observers. Nithya Raman, a city councilmember, secured a spot in a November runoff once mail-in ballots were tallied — an outcome prediction market traders had not foreseen.

In July, Maryland's elections administrator wrote to the state prosecutor requesting an investigation into whether prediction market contracts tied to elections run afoul of a state law that bans wagers on election outcomes.

Neither Kalshi nor Polymarket answered questions on whether they plan to engage directly with election officials over their concerns. A Polymarket spokesperson said states lack legal jurisdiction to regulate prediction markets. Both platforms have said they have taken steps to prevent insider trading on their own platforms.

The concern over insider trading on prediction markets has extended beyond election offices. Goldman Sachs $GS updated its personal trading policy to ban employees from wagering on prediction market contracts involving electoral outcomes, financial market performance, and other sensitive topics. The White House also warned staff against placing bets on prediction markets using nonpublic government information.

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