RALEIGH, N.C. (WTVD) — Governor Josh Stein signed an Executive Order aimed at restricting how state employees interact with prediction markets, following growing concerns about insider information being used for financial gain.

The move comes about a month after a Fort Bragg soldier was federally charged, accused of using inside information ahead of the US military operation in Venezuela which led to the arrest of leader Nicolas Maduro.

Stein said he has no indication that state empoyees in North Carolina have engaged in inappropriate conduct but cited recent high-profile cases as a reason to act.

“There’s story after story after story of insane bets, bets of millions of dollars immediately before an action takes place, and then the action takes place,” said Stein.

Wednesday, an unsealed federal criminal complaint alleged a Google employee fraudulently made more than $1 million by using insider information to place Polymarket bets.

Prediction markets allow users to buy and sell contracts based on the outcome of future events, ranging from gas prices to stock market performance or even entertainment rankings.

“In 2025, an estimated $63.5 billion was traded in prediction markets, a 300% increase from the year before,” Stein said.

Unlike traditional gambling, where participants place bets against a casino or operator, prediction markets involve trading contracts with other users.

However, concerns about insider trading have drawn increased scrutiny. While platforms such as Kalshi and Polymarket prohibit insider trading, questions remain about enforcement.

“(What) the Executive Order is doing (is) if you’re a state employee and you become aware of important material information because of that position, that would allow you to take advantage of Polymarket, for example, or one of the predictive markets that are available and to profit by that, that’s unfair, and we should prohibit that as a matter of fairness and as a matter of law,” said Scott Peeler, an adjunct professor at the UNC School of Law, who compared it to an individual buying or selling stocks based off nonpublic knowledge.

Stein’s Executive Order prohibits state employees from using information obtained through their official roles to trade in prediction markets.

“Public employees with insider information must not participate in these predictions markets,” Stein said. “People need to have faith that their public servants are working on their behalf, not leveraging their knowledge unfairly to win a bet and make money.”

Peeler described how authorities track signs of possible insider trading.

“They look for trades that seem precipitously advantageous. Things that seem a little strange that somebody with that trading pattern all of a sudden just happens to luck into the exact moment in time where they could either gain a massive advantage or the corollary to that avoid a massive downfall. And so I think the markets can regulate themselves, and to the extent they’re trying to avoid negative headlines and or to lean into working cooperatively in ways that are based in fairness, I think it would be to their advantage to do some self-regulation. The government can certainly, to the extent, be it federal or state, wanted to investigate a similar advantage or avoiding a disadvantage could use traditional law enforcement methods of subpoenas and or getting that information to look at those precipitously advantageous trades and build cases off of them,” Peeler shared.

The order comes as lawmakers in Washington continue debating potential regulations for prediction markets, while individual states begin to take their own actions.

“We’re all watching intently to see whether the federal government is going to step into a role that traditionally in years past it had been serving,” Peeler said, “and whether in the current administration and the current Department of Justice this will be a priority or not.”