Yes, spy is a Scrabble word!

Verb

1. Catch sight of

2. Watch, observe, or inquire secretly

3. Catch sight of; to perceive with the eyes

4. Secretly collect sensitive or classified information; engage in espionage

Noun

1. (military) a secret agent hired by a state to obtain information about its enemies or by a business to obtain industrial secrets from competitors

2. A secret watcher; someone who secretly watches other people