North Carolina Gov. Josh Stein has signed an executive order banning state employees from using work-related inside information on prediction markets. The order applies to platforms where users trade contracts tied to future events. The rule covers state employees who may learn nonpublic information through their jobs. It targets trading on platforms such as Kalshi and Polymarket when that information could affect the result of a market.
Order sets workplace ethics rules
Executive Order No. 37 creates new ethics rules for state employee participation in prediction markets. It bans workers from using nonpublic information gained through state employment to trade or profit. The order also stops employees from using their job to influence an event where they hold a prediction market position. The rule is meant to prevent officials from affecting outcomes that could benefit their own trades.
The North Carolina State Ethics Commission will help develop guidance for employees. State agencies are also expected to communicate the rules to workers covered by the order.
Prediction markets raise new risks
Prediction markets allow users to trade contracts on outcomes such as elections, sports, weather, public policy and economic events. Some markets can involve events where government employees may have early or private information.
That creates a risk different from traditional sports betting. A public employee may learn about a pending decision, emergency response, regulatory action or policy update before the public does. The order does not ban all state employees from using prediction markets. It focuses on insider information, workplace influence and conflicts of interest.
Wider concern follows recent cases
The North Carolina action comes as prediction markets face more scrutiny over insider trading and manipulation. Regulators and prosecutors have been looking more closely at cases where users may have traded using private or confidential information.
Similar concerns have also reached other states. Illinois Gov. JB Pritzker signed an executive order in April banning state employees from using insider information on prediction markets.
State agencies must update guidance
North Carolina agencies will need to make sure employees understand the new limits. That means explaining what nonpublic information is and when a prediction market trade could create a conflict. The order also lets agencies handle prediction market activity as an ethics matter. That makes the rules part of employee conduct, not only an issue for gambling or financial regulators.
