Full Breakdown
Illinois Governor JB Pritzker Issues New Rules on Prediction Markets and Artificial Intelligence for State Employees
4/28/2026, 2:48:55 AM
Executive Order Bans Insider-Info Betting in Prediction Markets
On Tuesday, Governor JB Pritzker signed an executive order that bars Illinois state employees from placing wagers in prediction-market platforms when the bets rely on nonpublic information obtained through their official duties. The order expands an existing prohibition on using confidential state-contract data for personal gain to include all prediction-market activity, whether the bet is made for the employee or a third party.
Background: Growing Scrutiny of Prediction Markets
Prediction markets—online venues where users wager on outcomes such as elections, geopolitical events, or corporate actions—have attracted federal and state attention for potential insider-trading violations. In the weeks preceding the order, the Justice Department charged an Army soldier with using classified information to profit from bets tied to Venezuelan President Nicolás Maduro’s arrest. Separately, the platform Kalshi fined and suspended three political candidates for betting on their own races.
Legislative Proposals Targeting Prediction Markets
State lawmakers have introduced two bills addressing the industry. A House proposal would largely prohibit Illinois residents from betting on sports, deaths, political outcomes, or catastrophic events and would set a minimum betting age of 21. A Senate bill would require prediction-market operators to obtain a state license and would create a mechanism for the state to tax earnings from such platforms.
AI Guardrails for State Agencies
The Illinois Department of Innovation and Technology (DoIT) issued a uniform policy permitting AI use across most state agencies while imposing three core restrictions: AI tools may not be discriminatory or illegal, may not make decisions without human oversight, and may not access confidential or sensitive information without agency-head approval. Agencies that provide public access to AI systems or use AI for decision-making must disclose such use. The state treasurer’s office requires pre-approval for AI tools and mandates use of Microsoft Copilot; the comptroller’s office adopts the same standards. The attorney general’s office currently lacks written AI guidelines.
Official Statements & Responses
Gov. Pritzker’s spokesperson Matt Hill said the order is a proactive measure to prevent potential abuses, not a reaction to any specific employee conduct. DoIT spokesperson Jennifer Jennings described the AI policy as a balance between “opportunities for enhancing the ability of State government and its employees to serve Illinois residents” and the risks posed by the technology. Treasurer’s office spokesperson Eric Krol emphasized that the AI rules aim to “safeguard confidential information and maintain reliable, high-quality work product.”
Criticism & Opposition
Critics have pointed to recent insider-trading allegations and the Kalshi sanctions as evidence that prediction markets pose ethical and security risks. Legal scholars note that the Illinois Gaming Board’s cease-and-desist letters to Kalshi and Polymarket, combined with a federal lawsuit asserting Commodity Futures Trading Commission authority, highlight unresolved jurisdictional disputes.
Data & Statistics
- Illinois Gaming Board sent cease-and-desist letters to Kalshi and Polymarket early 2025.
- DOJ charged one Army soldier for classified-information betting linked to Maduro’s arrest.
- Kalshi fined and suspended three political candidates for self-betting.
- House proposal bans betting on sports, deaths, political outcomes, catastrophic events; sets betting age 21.
- Senate bill requires state licensing of prediction-market operators and imposes a tax-collection mechanism.
Conflicting Reports & Gaps
A federal lawsuit contends that the Commodity Futures Trading Commission, not the Illinois Gaming Board, holds regulatory authority over prediction-market platforms, a dispute that could reach the Supreme Court. Additionally, the attorney general’s office has no publicly available AI policy, creating a regulatory gap within the state’s executive branch.
Verbatim Quotes
- “Illinois has been sort of on the forefront of striking back against these prediction markets,” — Karl Lockhart, Assistant Professor of Law, DePaul University
- “There’s both a financial incentive and a public policy sort of like morals, ethics incentive to regulating these prediction markets,” — Karl Lockhart
- “AI represents opportunities for enhancing the ability of State government and its employees to serve Illinois residents. The policy was drafted to balance those opportunities against the risks of this technology,” — Jennifer Jennings, DoIT Spokesperson
- “The goal of this policy is to allow the Treasurer’s Office to explore ways that innovative technology can enhance the work that the office does while safeguarding confidential information and maintaining reliable, high quality work product,” — Eric Krol, Treasurer’s Office Spokesperson
What’s Next
The treasurer’s office will lead a National Association of State Treasurers discussion on AI use in unclaimed property in June. Legislative deliberations on the House and Senate prediction-market bills are slated for the remainder of the 2026 session, while the federal jurisdictional lawsuit proceeds through the courts, potentially shaping the future regulatory landscape for prediction markets nationwide.
