NC Gov. Stein Signs EO 37 On Prediction Markets

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Mon Jun 01, 2026, 7:00 am ET

Read Time: 5 minutes

NC Gov. Stein Signs EO 37 On Prediction Markets

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North Carolina Governor Josh Stein has signed Executive Order No. 37 (EO 37). This prohibits state employees from using nonpublic government information to trade on prediction markets.

The order arrives as prediction markets continue expanding across the United States. These platforms allow users to speculate on future events ranging from elections to economic indicators and geopolitical developments. Their growth has attracted increased scrutiny from regulators and lawmakers concerned about potential misuse of privileged information.

Stein's executive action seeks to strengthen public trust in government operations while addressing ethical concerns surrounding prediction market participation. The move also places North Carolina among a growing number of states examining how emerging prediction market platforms fit within existing regulatory frameworks.

While the order does not prohibit all participation in prediction markets, it specifically targets the use of confidential government information for financial gain. The policy reflects broader concerns about market integrity as prediction platforms become more influential and widely used.

EO 37 Targets Insider Information Concerns

EO 37 prohibits employees within agencies under the governor's authority from using nonpublic information obtained through their official duties to participate in prediction markets. This executive order is an extension of the North Carolina State Ethics Act.

The order also bars state workers from using government resources to engage in such activities.

Stein issued the directive amid rising concerns that government employees could potentially leverage confidential information to gain an unfair advantage in markets tied to public policy, economic decisions, military operations, and political events.

The governor emphasized that maintaining public confidence remains a top priority.

"Public employees with insider information must not participate in these prediction markets. 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," Gov. Stein stressed.

The order expands upon existing provisions within North Carolina's ethics laws, which already prohibit public officials from using confidential information for personal financial benefit. However, the executive action specifically addresses prediction markets, a rapidly growing sector that has generated billions of dollars in trading volume.

The governor's office noted that the state has not identified any instances involving North Carolina employees. Nevertheless, officials argued that preventive measures are necessary as prediction markets continue gaining popularity.

The action also arrives during a period of significant growth across gambling-related sectors. Alongside the expansion of prediction markets, both US online sportsbooks and broader North Carolina gambling initiatives continue evolving under increasing regulatory oversight.

Growing Regulatory Tension Between States and Prediction Markets

Stein's order highlights a broader conflict between state governments and prediction market operators.

Several states have challenged prediction market platforms, arguing that certain event contracts closely resemble sports betting and other forms of gambling. Meanwhile, operators such as Kalshi maintain that their products fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC).

The legal landscape has become increasingly fragmented.

In New Jersey, Kalshi secured a significant victory when the Third Circuit Court of Appeals sided with the company and allowed its sports event contracts to continue operating while litigation proceeds. 

However, Nevada regulators recently achieved a major win of their own. The Ninth Circuit Court of Appeals upheld a lower court ruling that blocked Kalshi's sports-related contracts in the state, creating a split among federal appellate courts.

The conflicting decisions underscore the growing uncertainty surrounding the regulation of prediction markets. States continue asserting their authority to regulate activities they view as gambling, while operators argue that federally regulated event contracts should remain beyond the reach of state gaming laws.

Minnesota recently escalated the debate even further. In May 2026, lawmakers approved a first-in-the-nation measure that makes offering certain prediction market contracts a felony offense under state law. The legislation immediately sparked legal challenges from both Kalshi and the CFTC, setting up another high-profile battle over whether states can restrict federally regulated prediction market products.

Other states, including Maryland, Arizona, Illinois, Montana, and Ohio, have also pursued enforcement actions or issued cease-and-desist orders against prediction market operators. As a result, the industry now faces a patchwork of legal interpretations that vary significantly across jurisdictions.

North Carolina Focuses on Ethics and Public Trust

Rather than pursuing direct legal action against prediction market operators, North Carolina has chosen a different approach.

EO 37 addresses employee conduct through ethics and compliance measures within the Governor's authority. This approach is different from attempting to regulate the prediction market platforms directly or enforce a statewide consumer ban. The strategy allows the state to address potential conflicts of interest while broader regulatory disputes continue playing out in courts and legislatures nationwide.

Moreover, the approach recognizes the growing overlap between prediction markets, financial regulation, and public sector integrity. Modern platforms increasingly offer contracts tied to elections, government actions, economic indicators, and geopolitical developments. Consequently, public officials may possess information that could influence market outcomes before it becomes available to the general public.

North Carolina's action demonstrates how states can use existing ethics frameworks to address emerging risks rather than waiting for federal regulators to establish comprehensive rules. The order also reflects growing concerns that prediction markets are moving beyond traditional financial forecasting and into areas that directly intersect with government decision-making.

As debates over federal and state authority continue, Stein's executive order offers a different model for addressing prediction market concerns. Instead of challenging the legality of the platforms themselves, North Carolina is focusing on protecting public trust and preventing the misuse of confidential government information.

Jonathan Rodriguez
Jonathan Rodriguez

Jonathan is an avid basketball fan, and is often looking forward to the next upcoming NBA season when not checking players' stats during games. He also likes to keep his ears on the ground for the latest rumblings in the online casino industry.

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