Santos' Prediction Market Trades
Kalshi refers former Rep. George Santos to federal prosecutors for suspicious trades
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Prediction marketplace Kalshi has referred former U.S. Rep. George Santos to federal prosecutors after detecting suspicious trades he allegedly placed against his own attendance at President Trump's State of the Union address, according to AP. The company also reported the activity to the Commodity Futures Trading Commission. Santos reportedly pocketed "tens of thousands of dollars" from the scheme, per NPR.
Santos, who served 122 days in prison before Trump commuted his 87-month sentence for fraud and identity theft, denied knowing about the referral. When reached by NPR, he said, "Well, that's news to me."
Santos Bet Against Himself Attending the Speech
On February 23, 2026, Santos posted a video to X saying, "I'm going to be there for the State of Union in the gallery, guys." That post drove Kalshi's betting odds for his attendance up to 75%, according to AP. Behind the scenes, Santos had allegedly placed bets that he would *not* attend — meaning he stood to profit if he stayed home.
During Trump's address on February 24, Santos posted on X: "Watching SOTU from an airport tv was not part of the plan! FML." The odds crashed to near zero almost instantly, per NPR. Kalshi's internal monitoring flagged the trades, froze the account, and reported everything to regulators and the Department of Justice.
CFTC and DOJ Now Both Investigating the Trades
The Commodity Futures Trading Commission, which regulates Kalshi, has pledged to crack down. CFTC Chair Michael Selig warned, "If you attempt to engage in manipulation, fraud, or insider trading, we will find you and take action." The agency named prediction market insider trading a "top priority" in April 2026, according to Reuters.
The U.S. Attorney's Office for the Southern District of New York is reportedly leading the criminal probe, per Reuters. Legal analysts say the case may be framed as market manipulation rather than classic insider trading. Santos allegedly created a false impression that he would attend, then cashed in when the odds collapsed.
Santos Has a Long History of Fraud Charges
Santos was expelled from Congress in December 2023. He later pleaded guilty to 23 felony counts, including wire fraud and identity theft, according to NPR. Trump commuted his sentence in late 2025, after Santos had served just four months at the Federal Correctional Institution in Fairton, New Jersey.
Any new criminal conviction could mean fresh federal charges on top of his prior record. If prosecutors prove he used social media posts to knowingly deceive the public for financial gain, he could face wire fraud charges, according to Forbes.
Prediction Markets Face Broader Crackdown After Case
This is not the first insider trading case tied to prediction markets. A U.S. Army soldier was charged for betting $400,000 on the capture of Nicolás Maduro using confidential military briefings. A Google employee was charged for betting $1 million on search trends using internal data, according to Reuters. Kalshi's total trading volume hit $585.8 million on June 1, 2026, showing how large these markets have grown.
House Oversight Chairman James Comer launched a formal investigation into Kalshi and rival platform Polymarket in May 2026. He said, "Internal records held by prediction market platforms are the only means by which bad actors can be identified." The CFTC has also proposed new rules to require platforms to collect employer data from users to catch potential insiders faster, per AP.
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