Google Engineer in $1.2M Polymarket Case Wants It Dismissed Because He Was Just Gambling

A Google engineer accused of using confidential company information to make about $1.2 million on Polymarket is asking a federal judge to dismiss the case, arguing that he was gambling on an offshore prediction market rather than trading commodities.

Michele Spagnuolo’s lawyers filed the motion Wednesday. They are not contesting the basic existence of the wagers described by prosecutors. Instead, they are challenging the legal framework used against him, arguing that Polymarket event contracts are wagers rather than “swaps” covered by the Commodity Exchange Act.

Spagnuolo, an Italian citizen living in Zurich, also argues that U.S. commodities law does not reach his activity. His lawyers point to the offshore structure of the Polymarket platform and his location in Switzerland, according to WIRED.

The defense is attacking the legal classification of the contracts at the heart of the government’s case.

The Defense Is Attacking the Word “Swap”

The Commodity Futures Trading Commission has treated the Polymarket contracts at issue as swaps under the Commodity Exchange Act.

The CFTC’s civil complaint alleges that Spagnuolo used sensitive, nonpublic information about Google’s 2025 Year in Search results to trade contracts tied to search rankings. The agency says those contracts fall within the federal commodities regime and that his use of confidential information violated the law.

Spagnuolo’s lawyers take the opposite position.

They argue that contracts asking questions such as who will be Google’s most-searched person are event wagers, not financial instruments Congress intended to regulate as swaps. Applying the swaps definition to such bets, they contend, could produce an absurdly broad result in which ordinary wagers, raffles or other contests could also fall under commodities law, according to WIRED.

The jurisdiction argument follows from that position. If the contracts were gambling rather than swaps, his lawyers argue, federal commodities law would not give the government authority over a Swiss resident placing wagers through an offshore platform.

That remains a defense theory, not a judicial finding. Spagnuolo faces both a CFTC civil case and a separate criminal case in the Southern District of New York, where prosecutors have charged him with commodities fraud, wire fraud and money laundering.

Prosecutors Say He Used Google’s Private Data

The government’s case centers on Spagnuolo’s access to Google’s internal information.

According to the CFTC, Spagnuolo used the online alias “AlphaRaccoon” to trade Polymarket contracts tied to Google’s Year in Search rankings. Prosecutors allege that he used nonpublic information before Google released its annual list and placed roughly $2.75 million at risk across the trades.

The complaint describes a near-perfect record across roughly two dozen contracts. The wagers included positions tied to questions such as whether Bianca Censori would rank among Google’s most-searched people and whether Pope Leo XIV would appear among the top results.

When Google published its Year in Search results on Dec. 4, 2025, the positions allegedly resolved in Spagnuolo’s favour, producing about $1.2 million in profit, according to the government’s allegations.

Those figures have not been established at trial.

Google subsequently placed Spagnuolo on leave. The company has said employees are prohibited from using confidential information for personal gain.

The government’s theory therefore goes beyond whether Spagnuolo was simply lucky on a prediction market. Prosecutors allege that he had access to information through his employment and used it to position himself before that information became public.

The Fight Goes Beyond One Google Employee

Spagnuolo’s motion arrives amid a broader dispute over how prediction-market contracts should be treated under U.S. law.

The CFTC has asserted that certain prediction-market contracts are swaps and therefore fall under federal commodities regulation. That gives the agency a framework for policing conduct such as fraud and alleged insider trading on those markets.

The classification also has consequences for the platforms themselves. Prediction-market companies have fought state efforts to classify their products as gambling, while federal regulators have treated some event contracts as financial instruments subject to federal oversight.

Spagnuolo is now using the opposite side of that legal divide as his defense.

If the contracts are wagers rather than swaps, his lawyers argue, the federal commodities statute cannot be used against him in the way prosecutors have attempted.

A Second Insider Case Raises the Same Question

The argument is not unique to Spagnuolo.

Gannon Ken Van Dyke, a U.S. Army Special Forces master sergeant, was charged earlier this year after prosecutors alleged that he used classified information about a U.S. operation involving Venezuela to place Polymarket wagers. The government says he made about $410,000 from those trades.

Van Dyke’s defense has also argued that the Polymarket contracts were gambling rather than swaps. The CFTC has pushed back, arguing that the event contracts qualify as swaps under the Commodity Exchange Act.

The cases could force courts to confront a question that has followed prediction markets as they have expanded: whether an event contract is fundamentally a financial product, a bet or something that can occupy both categories depending on the circumstances.

A Win on Swaps Would Not End Everything

Even if Spagnuolo persuades the court that the Polymarket contracts are not swaps, that would not automatically establish that his alleged conduct was lawful.

The criminal case also includes wire-fraud and money-laundering allegations. Those charges do not depend solely on the government’s classification of a Polymarket contract as a swap.

His lawyers are therefore seeking to cut away a central part of the government’s commodities-law theory, not obtain a judicial finding that the alleged use of Google’s confidential information was permissible.

The motion puts the prediction-market industry’s unresolved identity problem at the center of a criminal case: if these contracts are swaps when regulators need them to be financial products, can they be treated as gambling when a defendant needs them to be bets?