San Diego County bars officials from prediction-market insider trading

The San Diego County Board of Supervisors unanimously approved an anti-corruption measure on Wednesday that bars current and former county employees from using nonpublic information, or information tied to their official duties, to trade on prediction markets such as Kalshi and Polymarket. The vote also asks staff to design a two-year prohibition on former officials and employees lobbying the county and to develop amendments to the county’s conflict-of-interest code, including disclosure of prediction-market trading on economic interest statements.

Supervisor Terra Lawson-Remer said the county was trying to get ahead of a problem before insider trading became a local issue. "We haven’t seen any instances of this happening here at the county, thank goodness," she said, adding that "it’s better to have rules in place before something goes sideways." She said public service "should never become a private payday" and argued that county staff should not be able to "cash in by selling access to your former colleagues or betting on confidential information the public does not have."

Lawson-Remer cited a White House teleprompter operator who was placed on leave after reportedly making more than $100,000 betting on the contents of President Donald Trump’s speeches on Kalshi. She said the White House had already warned staff against using nonpublic information on prediction markets.

San Diego County already requires a Conflict of Interest Code under the Political Reform Act, and that code identifies the positions that must file a Statement of Economic Interests, or Form 700. The county says Form 700 is a public document meant to alert officials and the public to financial interests that may create a conflict. A board letter backing the measure said current rules can require a county employee to disclose a $50 gift from a contractor but not the use of nonpublic information on a betting app like Kalshi or Polymarket, because the code was written before those apps existed.

The Justice Department has announced the unsealing of an indictment charging Army Master Sgt. Gannon Ken Van Dyke with using classified information to make wagers on Polymarket and with profiting approximately $409,881. The CFTC has also said federal law still applies to illegal trading practices on designated contract markets, and in 2022 it ordered Blockratize, Inc. d/b/a Polymarket to pay a $1.4 million penalty and wind down noncompliant event markets. Separately, CBS News reported that nine connected Polymarket accounts made more than $2.4 million betting almost exclusively on U.S. military actions in Iran.

The board expects Chief Administrative Officer Ebony Shelton to return within 60 days with amendments to the conflict-of-interest code and options for rules covering prediction-market trading.