Placing bets or gambling today looks completely different from what it did a decade ago. Back then, most bets happened through physical betting shops or were locked in via a phone call.
At the time, gambling mainly revolved around football matches, horse racing, or casino games. Now people can place bets from their smartphones on almost anything: politics, global events, celebrity drama, cryptocurrency prices, or even who will become the most-searched person on Google.
This expansion has created a new frontier for insider trading. With betting markets now broader than ever, people with insider information have begun engaging on prediction-based platforms. This completely changes how insider trading has worked in the past, where executives traded stocks using secret earnings data. But now any employee with privileged information who bets on that information could be committing insider trading.
A recent case involving Google appears to show exactly how that can happen. The US Department of Justice (DOJ) has charged a Google employee, Michele Spagnuolo, an information security engineer, for allegedly using confidential Google search data he gained as an employee to place bets on Polymarket, one of the most popular prediction market platforms in the world.
Ejiro Onose
"As alleged, Spagnuolo violated the duties he owed to his employer and used Google's confidential business information to make more than $1.2 million in trading profits on Polymarket. Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted," said Jay Clayton, US Attorney for the Southern District of New York, in a press release.
Spagnuolo, who had reportedly worked at Google for 12 years according to his LinkedIn profile, bet on Google's "Year in Search 2025" results — specifically, who would be the most-searched person of the year.
The complaint filed against him describes this, saying, "Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google's confidential, commercially valuable internal data."
According to investigators, Spagnuolo used the name "AlphaRaccoon" on Polymarket to place his bets, using cryptocurrency from different accounts. The FBI says they found one of these accounts he had opened with his Italian ID card.
The complaint described this as him taking "deliberate steps to conceal his unlawful use of non-public information" by obscuring where the money came from.
Investigators further alleged that Spagnuolo risked more than $2.7 million on bets related to Google’s “Year in Search 2025” results. After the results were publicly released in December 2025, his AlphaRaccoon account allegedly generated more than $1.2 million in profits.
Responding to this case, a Polymarket spokesperson told TechCrunch that the company "worked closely with the U.S. Attorney's Office for the Southern District of New York and the CFTC and is the only prediction platform to date whose cooperation has led to insider trading charges in the United States."
Google also chimed in on the matter in a statement reported by TechCrunch, saying, "The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies. We've placed the employee on leave and will take the appropriate action."
The case joins a growing list of insider-trading investigations tied to prediction markets. In April, federal authorities charged a US Army Special Forces soldier with wire and commodities fraud. He allegedly used classified, non-public intelligence to place bets on Polymarket regarding the capture of Venezuelan President Nicolás Maduro, illegally profiting more than $400,000. Also earlier this year, a military reservist was indicted in Israel for using confidential inside knowledge to place suspicious wagers on a specific Israeli military strike against Iran prior to the event taking place.
Even The New York Times released an investigative report earlier this month revealing that dozens of Polymarket bets showed indications of insider trading.
As for Spagnuolo, he is out on a $2.25 million bond but hasn't entered a plea yet. Ultimately, his fate will be determined by the courts. This case could serve as a history lesson on how insider trading has transformed beyond Wall Street to employees who work at large organizations handling privileged information. The Spagnuolo case is a reminder: prediction markets have rules, and the feds are watching.
David Adubiina
