Federal authorities charged a Google software engineer in late May with insider trading after he allegedly won $1.2 million betting on Polymarket. The case is one of several recent incidents raising concerns about the use of nonpublic information on prediction platforms.
Michele Spagnuolo, 36, is accused of placing bets on musician D4vd and rapper Kendrick Lamar topping Google's most-searched list using confidential company data, prosecutors said.
A New York Times investigation in May identified more than 11,000 Polymarket accounts showing suspicious high-profit patterns. Separate allegations include a US Army special forces soldier receiving a $400,000 payout and former Congressman George Santos winning tens of thousands of dollars on specific outcomes.
Kalshi and Polymarket together have reached $150 billion in lifetime trading volume. The platforms operate under Commodity Futures Trading Commission oversight, while several states and Native American tribes have filed lawsuits claiming violations of gambling laws.
A Wall Street Journal report last week detailed a deceptive marketing campaign by Polymarket involving paid influencers. Columbia University professor Rajiv Sethi noted that the industry continues to grow amid ongoing regulatory debates.
