Illinois Gov. JB Pritzker signed an order on April 21 barring more than 60,000 state workers from using nonpublic government information to bet on prediction markets like Kalshi and Polymarket. Two days later, federal prosecutors charged an Army Special Forces soldier with doing exactly that, in uniform. The Justice Department says Sgt. 1st Class Gannon Ken Van Dyke walked away with $409,881 by trading classified Venezuela operation details on Polymarket. The same week, internal records show Illinois agencies are also running four different sets of rules on artificial intelligence, with one constitutional office having no written rules at all.
The two governance shifts arrived together. They tell different stories about how a state, in late April 2026, is trying to keep ahead of two technologies that mainstream wire copy is still treating as separate beats.
The Order, In Plain Terms
Executive Order 2026-04 took effect immediately. It blocks Illinois state employees, officers, appointees, and board members from using nonpublic information from their jobs to place or assist a bet on prediction markets and event-based contracts.
Sharing that information with a friend, a relative, or a hedge-fund cousin who might trade on it is also barred, whether or not the official ever sees a dollar.
Pritzker spokesperson Matt Hill told the Chicago Tribune the order was preventive, not a response to specific known misconduct inside Illinois agencies. Existing ethics law already prohibits using confidential information for personal gain in state contracts. The order writes prediction-market bets explicitly into that prohibition for the first time, with no minimum-dollar threshold and no need to show actual profit.
“Prediction markets have rapidly grown into a space where people can bet on real-world events without any oversight, including events people can influence,” Pritzker said in the April 21 announcement of Executive Order 2026-04.
A DOJ Indictment Lands 48 Hours Later
The order’s timing stopped looking abstract on Thursday morning. On April 23, the Justice Department announced charges against Sgt. 1st Class Gannon Ken Van Dyke, a 38-year-old active-duty Special Forces soldier stationed at Fort Bragg, North Carolina.
Prosecutors say Van Dyke helped plan Operation Absolute Resolve, the US military mission to capture Venezuelan President Nicolás Maduro, then opened a Polymarket account on Dec. 26, 2025. He placed roughly 13 bets between Dec. 27 and Jan. 26, 2026, on whether US forces would strike Venezuela and when Maduro would be removed.
His alleged take: $409,881 before the operation went public.
The charges include unlawful use of confidential government information, theft of nonpublic information, commodities fraud, wire fraud, and money laundering. According to the Justice Department’s announcement of the indictment, it is the first prediction-market insider-trading prosecution the department has ever brought.
Why Illinois Got Sued by Its Own Government
The federal lawsuit hit Illinois three weeks before the executive order. On April 2, the Commodity Futures Trading Commission and the Justice Department sued Illinois, Arizona, and Connecticut, asking a federal court to permanently block the states from applying gambling laws to federally licensed prediction-market operators.
The CFTC argues that event contracts traded on designated contract markets fall under the Commodity Exchange Act, not state casino statutes. Illinois had spent more than a year going the opposite way. The Illinois Gaming Board sent cease-and-desist letters to Kalshi, Crypto.com, and Robinhood on April 1, 2025, and to Polymarket on Jan. 27, 2026.
“Illinois has been sort of on the forefront of striking back against these prediction markets,” said Karl Lockhart, an assistant professor of law at DePaul University who studies financial-markets regulation. The state’s broader resistance to the Trump administration on policy may be one reason it ended up on the federal complaint, he told Capitol News Illinois.
Lockhart calls the current setup “a huge loophole” because operators “just have to comply with one set of regulations, rather than (rules from) each state around the country.” On the question of whether Congress quietly authorized federally regulated sports gambling when it wrote the swaps rules, he is blunt.
“Congress doesn’t hide elephants in mouseholes. If Congress had really meant to authorize these designated contract market places to offer sports gambling products, you’d think they’d be more explicit about it.”
Karl Lockhart, DePaul University College of Law
The Numbers Behind the Iran Bets
Pressure for the order built across the spring. After the US and Israel struck Iran on Feb. 28, traders gambled more than $529 million on Polymarket alone over the timing of the attack.
Six fresh wallets, all funded within 24 hours of the strikes, profited roughly $1 million combined, according to analytics firm Bubblemaps. One trader netted $553,000 by betting on a US strike against Iran 71 minutes before the news broke publicly, when Polymarket’s odds put the chance at 17%. CNN reported the same trader had built a 93% win rate on five-figure Iran bets across two years.
Kalshi has begun policing some markets, too. On April 22, the platform fined and suspended three congressional candidates for five years after finding they had bet on their own primary races: Mark Moran of Virginia ($6,229.30 fine), Minnesota state Sen. Matt Klein ($539.85), and Ezekiel Enriquez of Texas ($784.20). Moran told CNN the bets were a “stunt” to draw attention to what he called illegal gambling on prediction sites.
How the Spring Unfolded
- April 1, 2025. Illinois Gaming Board sends cease-and-desist letters to Kalshi, Crypto.com, and Robinhood. Illinois DoIT publishes its AI use policy the same day.
- Jan. 27, 2026. IGB sends a cease-and-desist letter to Polymarket.
- Feb. 28, 2026. US and Israel strike Iran. Six newly funded Polymarket wallets profit roughly $1 million.
- April 2, 2026. CFTC and DOJ sue Illinois, Arizona, and Connecticut to block state-level enforcement.
- April 21, 2026. Pritzker signs Executive Order 2026-04.
- April 22, 2026. Kalshi suspends three congressional candidates for betting on their own races.
- April 23, 2026. DOJ charges Sgt. Van Dyke with $409,881 in Polymarket profits tied to classified Venezuela intelligence.
Inside the Patchwork AI Rulebook
The same week’s other governance shift went almost unnoticed. Internal records reviewed by the Tribune show Illinois agencies are running a four-track AI regime, each with different guardrails, approval gates, and disclosure obligations.
The Illinois Department of Innovation and Technology’s AI use policy, dated April 1, 2025, lets state employees use AI broadly. The exceptions are AI that discriminates, makes decisions without human oversight, or touches confidential data without an agency head’s sign-off. Resident-facing AI must be publicly disclosed.
“AI represents opportunities for enhancing the ability of State government and its employees to serve Illinois residents,” DoIT spokesperson Jennifer Jennings said. “The policy was drafted to balance those opportunities against the risks of this technology.”
The treasurer’s office is tighter. Every employee must get preapproval before using AI and is required to use Microsoft Copilot. “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,” treasurer’s spokesperson Eric Krol said. Treasurer staff will lead a National Association of State Treasurers session on AI in unclaimed property in June.
| Office | Preapproval? | Tools Allowed | Written Rules? |
|---|---|---|---|
| DoIT (most agencies) | No, by default | All, with confidentiality and oversight limits | Yes, since April 2025 |
| Treasurer | Yes, every use | Microsoft Copilot only | Yes |
| Comptroller | Mirrors DoIT | Mirrors DoIT | Yes |
| Attorney General | Not specified | Not specified | None on file |
The Attorney General’s Blank Page
The thinnest documented AI posture in Illinois belongs to the office that handles consumer-protection cases against AI vendors. There are no written rules, no published guidelines, and no internal directives produced in response to Freedom of Information Act requests. A spokesperson for Attorney General Kwame Raoul did not respond to a request for comment.
State employees there can, on paper, use ChatGPT, Claude, or Gemini without preapproval, oversight, or disclosure mandate. That is the asymmetry: the office most likely to litigate AI harm is also the office with the least documented control over its own staff’s AI use.
The 50% Tax Buried in Senate Bill 4168
Pritzker’s order touches state workers only. Two pending bills would extend Illinois law to the platforms themselves and to ordinary residents, and one of them carries a number wire copy has glossed over.
House Bill 5059, introduced in February by Rep. Edgar Gonzalez Jr., would bar Illinois users from placing prediction-market bets on sports, deaths, political outcomes, and catastrophic events. It also sets a 21-and-over minimum age.
Senate Bill 4168, filed March 5, takes a different route. It creates a state license for prediction-market operators and imposes a tax of 50% of adjusted gross revenue. That rate is higher than Illinois’s graduated sports-betting tax, which tops out at 40%. Most coverage of the bill has flagged the licensing piece. The 50% number, which would make Illinois one of the most expensive markets in the country to operate in, has barely been mentioned.
“There’s both a financial incentive and a public policy sort of like morals, ethics incentive to regulating these prediction markets,” Lockhart said.
Frequently Asked Questions
Are Illinois state workers banned from using prediction markets entirely?
No. Executive Order 2026-04 only prohibits using nonpublic information from a state job to place or assist a bet on prediction markets like Kalshi or Polymarket. State employees can still wager using public information, in jurisdictions where the platforms remain legal pending the federal-state dispute.
What happens to a state employee who breaks the order?
The order extends Illinois’s existing ethics law on confidential-information misuse. Penalties can include termination, civil fines, and referral for criminal prosecution under state insider-information statutes. The Illinois Office of Executive Inspector General handles investigations of agencies under the governor’s jurisdiction.
Is Polymarket legal in Illinois right now?
It depends on which government you ask. The Illinois Gaming Board sent Polymarket a cease-and-desist letter on Jan. 27, 2026, treating it as illegal gambling. The CFTC’s April 2 federal lawsuit argues Illinois has no authority over the platform because event contracts are federally regulated swaps. The court has not yet ruled.
Can Illinois state employees use ChatGPT for work?
It depends on the agency. Under the DoIT policy in force since April 1, 2025, most state employees can use AI tools as long as the system does not access confidential data without agency-head approval, does not make unsupervised decisions, and is publicly disclosed when used in resident-facing services. The treasurer’s office requires preapproval and limits staff to Microsoft Copilot. The attorney general’s office has no written rules.
A federal court will decide whether Illinois can keep cease-and-desist letters in the mail. Sgt. Van Dyke’s case will decide whether classified-intel betting on a public platform is fraud, securities crime, or something the law has not named yet. Pritzker’s signature on April 21 bought Illinois a place in both arguments and a four-track AI rulebook the Capitol has not yet reconciled.
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