Gov. JB Pritzker’s administration is setting rules on two emerging technologies for state workers, joining state governments across the country in trying to stay ahead of rapidly shifting terrain.

One of them, prediction markets, has become overtly political. Pritzker issued an executive order on Tuesday barring state employees from placing bets based on nonpublic information obtained through their jobs, and in an accompanying statement, highlighted allegations of insider trading tied to actions by President Donald Trump’s administration. 

The other involves artificial intelligence in the workplace and is more technical. State employees face no blanket ban on using AI but operate under significant guardrails, according to policy records recently obtained by the Tribune.

The prediction market order in particular appeared to be a backhanded callout of the recent eyebrow-raising bets on the strikes in Iran and the removal of Venezuelan President Nicolás Maduro, which some critics have cited as signs of potential insider trading. Two days after Pritzker’s order, the Justice Department announced an Army soldier was charged with using classified information to profit from prediction market bets tied to Maduro’s arrest.

But while Pritzker’s actions may be read through the lens of his potential 2028 presidential ambitions, the broader issue of who can regulate prediction markets has been building for months. The booming industry allows users to place wagers on virtually any future real-world event, and it has drawn scrutiny at both the state and federal levels.

The Illinois Gaming Board has sent cease-and-desist letters to prediction market platforms, including Kalshi and Polymarket, since the beginning of last year, arguing the businesses were engaged in illegal gambling.

Earlier this month, the federal government filed a lawsuit against Illinois, asserting that the federal Commodity Futures Trading Commission, not the state gaming board, has regulatory authority over those platforms.

“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 writes about financial and securities markets regulation. 

That stance, combined with Illinois’ ongoing resistance to the Trump administration across a variety of policy areas, could help explain why Illinois was among a handful of states specifically targeted in the federal legal action, Lockhart said. Other ongoing litigation over prediction market regulation could ultimately reach the Supreme Court, he added.

Pritzker spokesperson Matt Hill said the governor’s order was intended to proactively block potential abuses and was not prompted by any specific concerns about state employees’ conduct. Still, allegations of insider trading and manipulation have swirled around prediction markets. 

In addition to the Justice Department charges against the soldier involved in the Maduro operation, the platform Kalshi recently fined and suspended three political candidates for betting on their own races.

A press release accompanying Pritzker’s order noted state employees are already barred from using confidential information from their jobs for personal gain in the context of state contracts. The new order explicitly extends that prohibition to prediction market bets placed for themselves or others. 

State lawmakers have also introduced legislation this session to address prediction markets more broadly. One House proposal would largely prohibit Illinois users from placing bets on sports, deaths, political outcomes or catastrophic events, and would set a minimum betting age in the markets at 21. A separate bill in the Senate would require prediction market operators to obtain a state license and would give the state a mechanism to collect taxes based on earnings.

“There’s both a financial incentive and a public policy sort of like morals, ethics incentive to regulating these prediction markets,” Lockhart said.

On the artificial intelligence front, state leaders are also strengthening guardrails. While backing legislation restricting AI use in hiring and education, Pritzker’s administration has implemented internal rules dictating how state employees and contractors may use the technology.

A policy drafted by the Illinois Department of Innovation and Technology, which applies broadly across most state agencies, largely permits AI use. The exceptions are that AI platforms cannot be discriminatory or illegal, make decisions without human oversight, or have access to confidential or sensitive information without approval from the agency head.

If an agency allows the public to interact with an AI system or uses AI to assist in decision-making, that use must be publicly disclosed, the policy states.

The policy acts as a uniform standard on AI for state agencies but allows individual agencies to draft more specific procedures, said DoIT spokesperson Jennifer Jennings.

“AI represents opportunities for enhancing the ability of State government and its employees to serve Illinois residents. The policy was drafted to balance those opportunities against the risks of this technology,” Jennings said in a statement.

Agencies under the governor’s office are not the only ones setting rules around AI use.

In the state treasurer’s office, all employees must obtain preapproval before using AI tools and are directed to use Microsoft Copilot when doing so. The policy also warns employees about AI model biases, their propensity to provide fake information and the risk of entering sensitive information into the models.

“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 and maintaining reliable, high quality work product,” treasurer’s office spokesperson Eric Krol said in a statement.

Treasurer’s office staff will lead a National Association of State Treasurers discussion on the use of AI in unclaimed property in June, Krol said.

The AI rules in the Illinois comptroller’s office closely mirror those created by DoIT, while the attorney general’s office has no written AI rules or guidelines, according to records obtained through Freedom of Information Act requests.

A spokesperson for the attorney general’s office did not respond to a request for comment.