Federal Probe of George Santos Over Kalshi SOTU Bets

Federal investigators are probing former congressman George Santos after a surge of trading on Kalshi tied to a market asking whether he would appear in the House gallery for the State of the Union. Authorities are examining whether trades used nonpublic information or whether the market was manipulated.

Kalshi platform records show $520,095 in trades on Feb. 22, about $1.49 million on Feb. 23 and more than $7.8 million on Feb. 24, the day of the address. Trading linked to Santos was unusually concentrated: on Feb. 20, 9,166 shares of the Santos contract changed hands. On Feb. 22, Santos-related trades totaled $182,881, about 35.16% of that day’s volume. On Feb. 24, Santos-related volume rose to $1,100,183, roughly 14.09% of the $7.8 million traded that day.

Kalshi staff flagged the transactions, froze the account tied to the Santos positions and referred the matter to the Commodity Futures Trading Commission and the Justice Department. Those referrals prompted federal inquiries. Regulators are reviewing trading records, the timing of public statements and whether information was available to other market participants.

One day before the speech, Santos posted on X: “I’m going to be there for the State of the Union in the gallery, guys.” After the post, market odds for his attendance rose from about $0.20 to roughly $0.76. People with direct knowledge of the trades say Santos had taken positions that would profit if he did not attend and that those positions paid off when he did not appear, producing what those people described as tens of thousands of dollars in gains.

Santos posted a statement on social media denying wrongdoing: “The bases of the accusation is preposterous and I look forward to supplying any information asked of me to any agency that inquires.” He added that his legal team had contacted the Justice Department and that he would provide further comment when appropriate.

The trading led another U.S. prediction market to end a paid influencer agreement with Santos. Kalshi has previously taken enforcement action against political candidates who traded on markets tied to their own races.

Santos was elected to Congress in January 2023 and served less than a year after false biographical claims surfaced. Prosecutors indicted him the following May on charges including wire fraud, money laundering and theft from political donors. The House later expelled him. He served four months of a seven-year federal sentence before President Trump commuted his punishment in October. Federal agencies have not announced findings and the inquiries are ongoing.