Chicago Considers Ban on Prediction Market Bets for City Staff

Chicago is weighing a ban that would prevent city employees and elected officials from using insider knowledge to place bets on online prediction markets like Kalshi and Polymarket. The proposed ordinance advanced in a unanimous voice vote by the City Council Ethics Committee and is expected to face a final vote next week.

What Happened

Ald. Timmy Knudsen proposed legislation to prohibit Chicago employees and elected officials from utilizing confidential information to wager on online prediction platforms such as Kalshi and Polymarket. The City Council Ethics Committee unanimously advanced Knudsen’s measure via a voice vote on Tuesday, July 7, 2026, according to the Chicago Tribune.

The proposed ordinance aims to clarify existing city law, which already prevents officials and employees from self-enrichment using insider information. Knudsen stated that while city attorneys might argue such bets are already illegal if taken to court, the emerging nature of prediction markets necessitates a clear and explicit ban due to a lack of federal regulation, as reported by the Chicago Tribune.

Key Details

• Ald. Timmy Knudsen introduced a measure to explicitly ban city staff and elected officials from using insider information on prediction markets, according to the Chicago Tribune.
• The City Council Ethics Committee approved the measure with a unanimous voice vote on Tuesday, July 7, 2026, according to the Chicago Tribune.
• The proposed ordinance is anticipated to proceed to a final City Council vote next week, as reported by the Chicago Tribune.
• Illinois Governor JB Pritzker reportedly issued an executive order in April banning state employees from similar activities using nonpublic job-related information.
• The Illinois Gaming Board has, according to the Chicago Tribune, issued cease-and-desist letters to prediction market platforms, including Kalshi and Polymarket, citing concerns about illegal gambling.
• The federal government recently filed a lawsuit against Illinois, asserting that the Commodity Futures Trading Commission, not the state gaming board, holds regulatory authority over these platforms, according to the Chicago Tribune.

Why It Matters

This initiative represents an attempt to establish clear ethical boundaries for public servants in regulated markets, specifically addressing platforms that allow wagers on a diverse range of outcomes, including local policy decisions and election results. The ban seeks to prevent the exploitation of nonpublic information for personal financial gain by individuals in positions of trust. This move aligns with broader efforts, such as the executive order issued by Gov. JB Pritzker, to regulate public sector engagement with prediction markets.

The situation also highlights a regulatory jurisdictional dispute between state and federal authorities concerning prediction markets. The Illinois Gaming Board has deemed these platforms to be engaging in illegal gambling, while the federal government asserts the Commodity Futures Trading Commission’s authority. This unresolved regulatory landscape contributes to the “gray” area that Chicago’s proposed ordinance intends to clarify for its employees and elected officials, as stated by Ald. Knudsen.

What’s Next

The proposed ordinance is likely to face a final vote by the Chicago City Council next week, according to the Chicago Tribune.

Originally reported by Chicago Tribune·Published 7 Jul 2026, 17:50