George Santos Reportedly Under Investigation for Insider Trading on Kalshi State of the Union Market
Former Congressman George Santos is reportedly under investigation for insider trading on Kalshi. The claims center on a prediction market tied to his attendance at the State of the Union address on February 24. He publicly stated he would attend, which moved probabilities sharply higher before he ultimately did not show.
The story raises immediate questions for prediction market operators and their sportsbook counterparts. With trading volumes spiking on both Kalshi and Polymarket, the case highlights how one participant’s actions can distort outcomes that operators price and hedge against. After eighteen years across iGaming and sportsbook operations, I see this as a reminder that information asymmetry remains a core risk when events hinge on individual behavior.
Public Statements and Market Movements
On February 23, Santos posted on X that he would be in the gallery for the address. He responded to claims that he was barred from attending, stating, “I’m going to be there for the State of the Union in the gallery, guys, just chill, trolls, chill.”
The release of the video saying he would be there sent his chances of attending up to 76% at Kalshi. Between his video on February 23 and the event on February 24, over $9.3 million was traded on the market. More money was on Santos than on any other person, with a total of over $3 million going on the 37-year-old.
On Polymarket, his chances rose to 78.5%. Almost $150,000 was traded on Santos at Polymarket, more than anyone except Nick Shirley. The YouTuber accounted for the majority of the trading, with $6.6 million of the total $7.8 million.
Santos confirmed the following day that he was not at the event. Some users accused him of trading on both platforms. Others sent disgruntled replies claiming he had duped them into wagering.
Santos Declines to Confirm or Deny Trades
In comments to NPR, Santos neither confirmed nor denied having a Kalshi account or trading on his attendance at the State of the Union. “I’m not saying yes, I’m not saying no,” he said when asked if he used the platform.
He said he was unaware of any investigation into his trading activity. Kalshi did not respond to confirm that it is reviewing his account or has referred the case to authorities. NPR reported that the company has requested an interview with Santos, but he has dodged those requests.
After the article was published, Santos took to X again to declare that he does not respond to “rag reporting.” He did not respond when contacted for comment.
Three people with direct knowledge of his trades told NPR that he had wagered on himself not attending the event at Kalshi. Santos later posted on X, “Leaking is the new currency of society. The worst part is, it’s not even true 99% of the time. I freaking hate people and their need for relevance on the backs of others.”
Background, Potential Penalties, and Precedent
Santos would still be in federal prison if his sentence had not been commuted by Donald Trump. He pleaded guilty to identity theft and wire fraud in August 2024 and was sentenced to 87 months in prison in April 2025, which he began serving that July.
Trump ordered his release in October. In a post on Truth Social, he stated, “George has been in solitary confinement for long stretches of time and, by all accounts, has been horribly mistreated. Therefore, I just signed a Commutation, releasing George Santos from prison, IMMEDIATELY. Good luck George, have a great life!”
If found guilty of trading on the markets at Kalshi and Polymarket, he could face time behind bars again. A Google employee was indicted last week on charges of commodities fraud, wire fraud, and money laundering. He allegedly used confidential company information to win over $1 million by trading on who would appear in the most-searched people of the year list.
Commodities fraud carries a maximum prison sentence of 10 years, while wire fraud and money laundering carry potential sentences of up to 20 years.
Risks, Regulatory Pushback, and Platform Responses
The Santos case is not without its limitations as a cautionary tale. Public figures have long influenced event-driven markets, and proving intent to mislead traders remains a high bar. Santos has refused to deny the trades outright but also claims the allegations are false in most cases. Without direct confirmation or leaked account data, the investigation could stall on evidentiary grounds.
That said, the volumes tell their own story. Over $9.3 million traded on the Kalshi market alone in roughly 24 hours. When one individual can shift probabilities from low to 76% with a single post, operators must weigh the integrity of their liquidity pools. Sportsbook and prediction market integrations already grapple with similar manipulation risks on player prop or appearance contracts.
Kalshi reportedly suspended Santos’ account after the State of the Union address in February. Yet the platform continued to offer markets related to him. Last month, it allowed users to trade on what Santos would say during a NewsMax interview. Almost $90,000 was traded on that market.
Several lawmakers have proposed bans on these kinds of markets that can be manipulated by one person. Minnesota passed a ban on mention markets, along with sports, and several other markets. In response, the CFTC filed a lawsuit against the state, taking particular exception to Minnesota’s prohibition of weather-related markets.
The Santos scandal may lead to further calls to restrict prediction markets. Trump, however, as he did with Santos, has publicly supported the CFTC and the industry as a whole.
The Bottom Line
This episode underscores the thin line between public persona and market integrity in prediction platforms. For operators scaling event contracts alongside traditional sportsbooks, the incentive to tighten identity verification and real-time monitoring is now clearer than ever. Expect heightened scrutiny on high-profile participant markets and renewed conversations around self-regulation before regulators step in harder. Industry executives should treat this as a prompt to review their own risk frameworks, especially where individual actions can swing millions in traded volume. For tailored guidance on navigating these operational and regulatory intersections, see SCCG Management’s advisory services at https://sccgmanagement.com/our-services/.
