The Department of Justice has initiated an investigation into former New York Republican Representative George Santos for allegedly engaging in insider trading on the prediction market Kalshi, according to reporting by NPR. The investigation focuses on bets placed by Santos regarding his attendance at President Donald Trump's State of the Union address, coinciding with Kalshi users betting on attendees for the event.
Santos had announced on social media that he would attend the State of the Union, which led users to place significant bets on his attendance. However, he later stated that he was watching the address from an airport, which caused the odds on Kalshi to decline. Santos reportedly had placed bets indicating he would not attend and profited tens of thousands of dollars from these trades, although the exact amount is undisclosed.
Kalshi flagged Santos's trades and froze his account, subsequently referring the case to the Commodity Futures Trading Commission and the Department of Justice, both of which opened investigations. Santos has not confirmed whether he has a Kalshi account and stated he was unaware of any investigation into his trades.
This investigation adds to the legal challenges facing Santos, who was expelled from the House in 2023 and later pleaded guilty to federal charges, including wire fraud and aggravated identity theft. He began serving a prison sentence in 2025 before receiving a commutation from Trump later that year. The case raises questions about the integrity of prediction markets like Kalshi and Polymarket, which have grown rapidly and face scrutiny regarding potential insider trading and market manipulation.
