Election and county officials across the country are moving to prohibit their employees from participating in prediction market contracts, describing the step as the tightest restriction available to them as the midterms approach.
With less than two months until the elections, officials said the bans are designed to ensure that workers with access to ballots do not commit insider trading on election-related contracts, CNBC reported.
“Obviously, we have no control over prediction markets themselves, or how people react to them,” said Thomas Galvin, a supervisor for Maricopa County, Arizona, who helps oversee voter tabulation and Election Day voting. He said a policy barring employees from trading or betting on non-public information goes a long way toward showing the public that officials are working to maintain transparent elections while staying aware of new technology.
Two Different Kinds of Numbers
The push comes as prediction market odds and traditional election polling often tell different stories — and as officials grow concerned that voters cannot tell them apart. Election odds on prediction markets function as a live response to breaking news, letting participants forecast and watch in real time where the market stands on a candidate’s likelihood of victory. Koleman Strumpf, a professor of economics at Wake Forest University, said that live accessibility gives prediction markets a competitive advantage over traditional forecasting polls. “By the time you see the poll, it’s ancient history,” Strumpf said.
A Kalshi spokesperson told CNBC that instant odds are a key feature of prediction markets, but described them as complementing polling rather than replacing it.
Pre-election polls, by contrast, measure a voter’s intention using a sample of respondents selected to represent a broader population, said Thessalia Merivaki, a professor of government at Washington State University. Unlike prediction markets, where anyone can forecast a winner, polls rely on statistical techniques to build their samples — and even the questions differ. “The question is very different. It doesn’t ask, ‘Do you think X candidate or Y candidate will win?’ Pre-election polls ask, ‘If the election were to be held today, who would you vote for?'” Merivaki said.
Galvin said he has seen the confusion firsthand while traveling around his district and county. “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.
Maricopa and Los Angeles
Maricopa County drew national attention after President Donald Trump repeatedly and falsely claimed he won the state against former President Joe Biden in 2020. That controversy helped drive Galvin to help draft a resolution adopted this July, which bans roughly 13,000 county employees from trading on non-public information, including topics involving weather events, elections and court hearings. The resolution followed an executive order signed by Arizona Governor Katie Hobbs banning state workers from insider trading on prediction markets.
Galvin said the prohibition reassures the public that the county champions election integrity — and protects employees if individuals cite prediction market odds to claim fraud.
Similar concerns surfaced earlier this year in Los Angeles, where vote counts did not match prediction market odds, according to Dean Logan, registrar-recorder/county clerk for Los Angeles County, who spoke on a July webinar hosted by the Partnership for Large Election Jurisdictions. In that race, city councilmember Nithya Raman advanced to a November runoff against incumbent mayor Karen Bass, while traders had anticipated Bass would face former reality TV star Spencer Pratt. Pratt led Raman early in the count, but Raman gradually pulled ahead as mail-in ballots were tallied after Election Day. Logan said early returns diverging from market expectations fueled suspicion about routine ballot processing and canvassing procedures, and that the situation drew threats and aggressiveness from observers with a stake in the outcome at a level not seen in prior elections.
States Push Back
Kalshi and Polymarket did not directly answer CNBC’s questions about whether they plan to speak with election officials over these concerns. A Polymarket spokesperson reiterated that states do not have legal jurisdiction to regulate prediction markets, while a Kalshi spokesperson highlighted the role prediction markets play in breaking news and political events. Both platforms have taken steps to prevent insider trading.
The friction over elections is unfolding alongside a broader fight between states and the Commodity Futures Trading Commission over regulatory oversight of event contracts. Some election officials argue the platforms are effectively gambling operators.
Outside Philadelphia, the election office in Delaware County, Pennsylvania, banned roughly 2,200 employees from trading on prediction market contracts tied to elections. James Allen, the county’s elections director, said the office’s oath already prohibited bets on elections and was later updated to cover prediction markets. “It makes sense to add prediction markets to that oath, because prediction markets are gambling, despite the dubious claims that they are not,” Allen said, adding that he does not want them to “infect our elections” and calling them the newest and most existential threat to undermining faith in elections.
Maryland’s administrator of elections similarly sent a letter to the state prosecutor in July, requesting an investigation into whether prediction market election contracts violate a state law prohibiting wagers on election outcomes.
CNBC’s Charlotte Morabito contributed reporting. Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
Source: www.cnbc.com — https://www.cnbc.com/2026/09/11/election-officials-ban-employees-from-prediction-markets.html
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