Former U.S. Representative George Santos is under investigation by two federal regulators after he promised to attend President Trump's State of the Union address in February — then bet on the prediction market Kalshi that he would skip it. Kalshi froze Santos's account and referred the case to regulators, who both opened insider-trading inquiries.
The Bet That Triggered the Probes
Santos publicly stated he would be at the State of the Union. Hours or days later — the exact timeline remains unclear — he placed a wager on Kalshi that he would not attend. Prediction-market contracts allow users to bet on event outcomes; if Santos had skipped the speech, his bet would have paid out. Kalshi detected the apparent contradiction between his stated intention and his trade and froze his account, then flagged the activity to two federal watchdogs.
Two Regulators, Two Investigations
Both agencies opened insider-trading probes, though neither has commented on the scope or timeframe. Insider-trading rules typically cover trading securities based on nonpublic information; whether a prediction-market contract falls under that definition is a key question. Santos has not publicly addressed the probes. Kalshi, which operates as a regulated exchange under Commodity Futures Trading Commission oversight, has not disclosed details of its referral beyond confirming the account freeze.
What Insider Trading Means on a Prediction Market
The cases hinge on whether Santos used his own nonpublic knowledge — that he might not attend — to profit. If he knew he would break his promise before others did, that could be considered inside information. Prediction markets have faced scrutiny before for potential manipulation, but an insider-trading charge over a politician betting on their own actions would be novel. The outcome could set a precedent for how regulators treat bets on personal conduct.
Both agencies are now sifting through Santos's account history and his public statements. No charges have been filed. The investigations are in early stages.
