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Federal regulators are investigating whether former congressman George Santos engaged in insider trading on the prediction market platform Kalshi. The platform referred Santos to the Department of Justice after detecting suspicious trades ahead of President Donald Trump’s Feb. 24 State of the Union address and also alerted the Commodity Futures Trading Commission.
The Kalshi trades that triggered a federal probe
According to sources, Santos placed bets on Kalshi predicting he would not attend the 2026 State of the Union address — while publicly declaring the opposite. On Feb. 23, he posted, “I’ll be in the gallery” for the president’s speech, sending market odds of his attendance surging to roughly 75%. The night of the address, he posted from an airport:
“Watching SOTU from an airport TV was not part of the plan! FML.” He later blamed a delayed flight for his absence.
Three people with direct knowledge of his trades told NPR that Santos misled the public and turned a profit in the tens of thousands of dollars based on that deception. Kalshi data shows Santos-related trading accounted for more than 35% of the market’s volume the day before the speech, with over $7.8 million wagered on Feb. 24 alone.
Once Kalshi’s compliance team identified the suspicious pattern, it froze Santos’ account and referred the matter to federal authorities.
Conflicting signals on DOJ involvement
Reporting on the extent of federal involvement has been mixed. NPR, citing two sources, reported that both the CFTC and the DOJ opened investigations. However, a DOJ official told the Washington Examiner there is no active investigation. The CFTC confirmed to one outlet that Santos is being investigated but declined to say for what or when the probe began. Neither agency has issued a public statement.
Wave of prediction market enforcement actions
The Santos case arrives amid a broader enforcement reckoning for prediction market platforms. Kalshi flagged more than 400 suspicious trades this year — more than double its 2025 total. The DOJ recently charged a Google employee with making more than $1 million on Polymarket using internal search data, and an Army soldier was charged in April with using classified information to win $400,000 on a Polymarket contract tied to Venezuelan President Nicolás Maduro’s capture.
In February, Kalshi publicly disclosed two previously closed cases: one involving a California gubernatorial candidate who bet on his own race and another involving a YouTube editor who traded on nonpublic information about a creator’s content.
The scrutiny also has a political dimension. The Trump administration has thrown its support behind prediction market operators and is actively suing states attempting to regulate them. Donald Trump Jr. has invested in Polymarket through his venture capital firm and serves as a strategic adviser for Kalshi.
Santos denies wrongdoing — and loses a paid deal
When NPR first reached Santos, he said the probe was “news to me” and declined to confirm whether he even held a Kalshi account. He also claimed to personally know Kalshi co-founder Luana Lopes Lara, calling her “a fellow Brazilian,” and said he would contact her directly. Kalshi’s investigation contradicts that claim, and records show the platform had already requested an interview with Santos — requests he has repeatedly declined.
According to news by Benzinga, in a March podcast appearance, Santos had addressed traders who lost money on his SOTU bet with little apparent remorse:
“I guess people lost money. Some people made unexpected money. That’s to show you how fragile these markets are.”
Following the allegations, rival platform Polymarket terminated its paid influencer contract with Santos, through which he had been promoting the platform to his millions of social media followers. In an X post, Santos called the accusations “preposterous” and said his legal team was in contact with the DOJ.
What Santos faces next
Santos pleaded guilty in 2024 to wire fraud, aggravated identity theft and money laundering tied to his congressional campaign. He was sentenced to 87 months in prison and ordered to pay nearly $374,000 in restitution. Trump commuted his sentence in October 2025, and Santos served roughly 84 days before his release.
Now, months after that release, he faces a fresh federal inquiry on a federally regulated platform — and the CFTC’s enforcement division can pursue civil penalties, disgorgement of profits and, if the evidence warrants it, a criminal referral.
