George Santos, the pardoned former congressman, has been referred to the Department of Justice and the Commodity Futures Trading Commission over trades he placed on the prediction market Kalshi. The referral stems from allegations that Santos bet against his own appearance at the State of the Union address while publicly promoting it.
The alleged scheme
According to the referral, Santos used Kalshi — a regulated prediction market where users wager on event outcomes — to place a financial bet that he would not appear at the State of the Union. At the same time, he was publicly hyping his attendance at the event. The move resembles a classic “short and distort” play: talk up the asset, then bet against it.
Santos was a member of Congress at the time of the alleged trades. If the allegations hold, they would represent an unusual twist on insider trading — a politician using non-public knowledge of his own plans to manipulate a prediction market.
Who sent the referral
The referral was made by an outside watchdog group that tracks conflicts of interest in Congress. It landed at both the DOJ’s criminal division and the CFTC’s enforcement arm. The CFTC has jurisdiction over Kalshi as a designated contract market, meaning bets placed there fall under commodities law.
The CFTC has not confirmed whether it has opened a formal investigation. A spokesperson for the agency declined to comment. The DOJ did not immediately respond to a request for comment.
Santos’s legal troubles
Santos was expelled from the House in 2023 after a series of financial scandals. He was later pardoned by President Trump in early 2025 for federal fraud charges related to campaign finance violations and unemployment benefits fraud. The pardon wiped out his federal criminal record but does not shield him from a new investigation into a different set of actions.
The Kalshi trades occurred after the pardon, according to the referral. That means the alleged betting is a separate matter from the earlier fraud case. It is unclear whether the pardon could still factor into any charges, since the trades would be a new offense.
What Kalshi says
Kalshi has not commented on the referral. The platform allows users to trade on the outcome of political events, including congressional votes and presidential addresses. It has grown rapidly in the past year, drawing scrutiny from regulators who worry about gambling disguised as derivatives trading.
Kalshi’s terms of service prohibit users from trading based on material non-public information. The company regularly refers suspicious activity to regulators. Whether it flagged Santos’s trades or the referral came from an outside party is not known.
The question now is whether the DOJ or CFTC will open a case. Both agencies have pursued prediction-market manipulation in the past. But a politician betting against his own public statements — that would be a first.
