By Howard Fischer
Capitol Media Services
PHOENIX — Think you know what day that Interstate 10 bridge over the Gila River will be open to traffic?
You're free to go to sites like Kalshi and Polymarket and see if they're willing to set up a wager.
As of now, however, that right doesn't apply if you happen to be working for, say, the Arizona Department of Transportation and have some insider knowledge of when the work will be done.
In a new executive order Thursday Gov. Katie Hobbs is telling the thousands of state employees under her control that if they profit from "nonpublic information,'' they are subject to being fired.
But it isn't just construction projects where where state employees may know something not available to everyone else.
Consider the National Guard where there are officers and civilian employees who may know about a planned deployment and seek to place a wager.
That isn't a far-fetched concept, with the U.S. Department of Justice bringing charges against an Army solider who knew about plans to send troops into Venezuela to capture President Nicolas Maduro. Prosecutors said he made more than $400,000 by making bets about the timing on Polymarket.
Also consider those working at the state Office of Economic Opportunity. They get an advance look at the state's monthly jobless rate.
And gubernatorial press aide Christian Slater acknowledged that it would be a violation of the executive order for someone to use insider information to wager on whether Hobbs will win a second term. That, he said, could be anyone who knows of a scandal about to break, "not that there is one,'' he quickly added.
What has made the order particularly relevant is that Arizona no longer has a law against gambling -- or, at least, not one that can be enforced.
A federal judge has ruled that wagers placed by Arizonans on Kalshi are beyond the legal reach of state Attorney General Kris Mayes.
U.S. District Court Judge Michael Liburdi ruled in May that Congress gave the federal Commodity Futures Trading Commission exclusive jurisdiction of what it calls the trading of "swaps.''
More to the point, the judge said that wagering money on future events -- including the outcome of elections -- fits the legal definition of swaps. And that, Liburdi said, preempts state laws which specifically restrict such wagering.
These online sites do offer multiple opportunities to make money.
On a national level, Kalshi has are active "markets'' on how high the unemployment rate will go, the tariff rate for China later this month, and whether members of Congress will be banned from trading stocks.
But there are local issues, too. Consider the upcoming Republican primary for governor.
If those putting down money are accurate, there's a 98.5% chance that Andy Biggs will win the July 21 race. But for those willing to go with a longshot, putting up just 1.1 cent will gain them a dollar if David Schweikert pulls off what, based on current polling, would be an upset.
Much of what is on Polymarket, at least regarding Arizona, also relates to winners and losers in political races, along with the standard wagers on how Arizona teams will perform.
There also is a chance to wager whether Arizona voters will pass a Republican-crafted ballot measure to further restrict the ability of transgender girls to participate in girls' sports. Based on current odds, 59% of those wagering think voters will approve, up from just 37% earlier this month.
And both platforms allow people to suggest new categories. That presents additional opportunities for state employees who know something based on their position to propose new markets.
The governor's executive order covers only the approximately 36,500 people who work for agencies that report to her.
That leaves out not only the legislative and judicial branches of government but other independent agencies that are run by their own elected officials, ranging from secretary of state and attorney general to the Arizona Corporation Commission, as well as independent boards and commissions. Hobbs, in her executive order, "encouraged'' each to adopt its own similar policies.
Whether Liburdi's ban on the state enforcing its own anti-gaming laws will remain is unclear.
The judge acknowledged that Arizona isn't the only state fighting with online prediction markets. In fact, the 9th Circuit Court of Appeals heard arguments earlier this year in a similar dispute, this one between Kalshi and the Nevada Gaming Control Board over whether that state can enforce its own laws.
What makes that case so important is that Arizona also is in the area over which decisions by the 9th Circuit set precedent. So any ruling in favor of Nevada could change Liburdi's conclusion.
