George Santos Fined and Banned From Prediction Markets After Betting on His Own Attendance

A Bet Against Himself — and the Public

Former Congressman George Santos agreed to pay $35,000 to settle a federal investigation into his suspicious trades on the prediction marketplace Kalshi after he bet against his own plans to attend President Donald Trump's State of the Union address. The scheme was as brazen as it was simple: Santos reportedly knew what he would do, bet accordingly, and walked away with a tidy profit — until federal regulators caught up with him.

The Commodity Futures Trading Commission (CFTC) announced that Santos will pay a $17,500 civil penalty and forfeit an additional $17,570 in profits under a settlement resolving allegations that he improperly profited from trades tied to his attendance at President Donald Trump's State of the Union address in February. He also agreed to a three-year trading ban.

How the Scheme Allegedly Worked

Regulators alleged that Santos placed a wager on Kalshi regarding his attendance at the State of the Union address, then publicly declared he would not attend, which likely affected the market's pricing. Prediction markets like Kalshi allow users to bet real money on the outcome of real-world events — in this case, whether a specific public figure would show up to a nationally televised address. When someone with inside knowledge of their own intentions places bets and then shapes public perception to match those bets, it's the kind of manipulation regulators say they cannot ignore.

The case originated when internal compliance systems at Kalshi flagged Santos' account activity and suspended his trading privileges, subsequently referring the case to both the CFTC and the Department of Justice. According to NPR, three people with direct knowledge of Santos' trades said he misled the public on purpose and profited based on that deception. Two sources told the outlet that when Kalshi detected the trades, it froze his account and referred the case to the CFTC and the DOJ.

Santos Pushes Back — Loudly

Defense attorney Joseph Murray stated that Santos had genuine intentions to attend the Capitol address but was thwarted by severe East Coast winter weather disruptions that grounded his travel plans. Murray argued further that Santos concealed neither his travel intentions nor his mid-transit change of plans, asserting there was no fraudulent intent or attempt to manipulate retail investors.

Despite settling with the CFTC, Santos criticized Kalshi, arguing that prediction markets should be regulated as gambling platforms rather than federally regulated derivatives exchanges. In a post on X, Santos called for lawmakers to strip Kalshi of what he described as the legal protections associated with "contract swaps." It was a defiant move — settling a manipulation case while simultaneously attacking the platform he allegedly manipulated.

A Bigger Warning for Prediction Markets

Santos was expelled from Congress in 2023 and later convicted of multiple counts of wire fraud and aggravated identity theft. He served three months in prison before Trump commuted his sentence last October. This latest settlement adds yet another legal chapter to one of the more turbulent post-congressional careers in recent memory.

The same day the settlement was announced, New York Attorney General Letitia James sued Kalshi, alleging the platform violated state gambling laws by offering event-based contracts without proper authorization. This case may set a precedent for how the agency handles similar violations in the future, particularly when individuals use their public positions to affect market results. As prediction markets grow in popularity and attract mainstream users, regulators are making clear that the same anti-fraud rules governing traditional financial markets apply here — and that trading on what you privately know, even about yourself, carries serious legal risk.