In a significant move to address concerns over insider information, Governor Josh Stein has signed an Executive Order that restricts how state employees engage with prediction markets. This decision comes in light of recent incidents, notably a case involving a Fort Bragg soldier charged with using insider intelligence prior to a U.S. military operation in Venezuela, leading to the arrest of the country’s leader, Nicolas Maduro.
Stein emphasized that although he has no evidence of misconduct among North Carolina state employees, the rise of high-profile cases warranted precautionary measures. He referenced troubling reports of substantial bets being placed just before pivotal events occur, illustrating a potential manipulation of information for personal financial gain.
The Executive Order prohibits state employees from leveraging any significant material information obtained in their official capacities for personal profit in prediction markets. “Public employees with insider information must not participate in these prediction markets,” Stein stated, highlighting the need for public trust in government officials. He underscored that citizens should have confidence that their public servants are acting in their best interests and not unfairly profiting from privileged knowledge.
Prediction markets are platforms where users can trade contracts based on future events, including predictions about economic trends, political elections, and entertainment outcomes. Stein referred to a staggering $63.5 billion traded in these markets in 2025, a threefold increase from the previous year. Despite their growing popularity, the potential for insider trading has raised alarms regarding ethical conduct.
Scott Peeler, an adjunct professor at the UNC School of Law, commented on the implications of the Order, stating that it aligns closely with regulations governing stock trading based on nonpublic information. He explained that tracking insider trading involves identifying suspiciously advantageous trades and patterns that imply prior knowledge of upcoming events.
As the situation unfolds, lawmakers in Washington are also deliberating potential federal regulations for prediction markets. Meanwhile, individual states are taking steps to safeguard against unethical practices. “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 noted. The ongoing discussions at both state and federal levels will be critical in shaping the future landscape of prediction markets and ensuring fair practices within them.
