George Santos may be the latest individual caught trading on insider information in a prediction market.
According to NPR, the U.S. Department of Justice (DOJ) is examining whether the former New York congressman placed bets on Kalshi using nonpublic details about his own plans. The market in question centered on whether Santos would attend President Donald Trump’s State of the Union address in February.
In the days leading up to the State of the Union address, Santos posted a video on X stating he would appear in the event. That public confirmation pushed the odds of his attendance on Kalshi close to 75% the night before the event, drawing millions of dollars in wagers across related markets. Santos did not show up to the State of the Union address, however. During the speech he posted on X that he was watching from an airport television instead. The odds on his attendance collapsed shortly afterward.
‘Some people made unexpected money’
People with direct knowledge of the trading activity later told NPR that Santos had bet against his own attendance using information that was not available to the rest of the market, and those bets reportedly netted him tens of thousands of dollars. Kalshi detected the pattern, froze the account, and referred the matter to the Commodity Futures Trading Commission (CFTC) and the DOJ. The platform also attempted to interview Santos as part of its internal review, but he did not respond to those requests.
When contacted by NPR, Santos said the investigation was news to him and declined to confirm whether he maintained a Kalshi account. “I’m not saying yes, I’m not saying no,” he stated. He added that he knew Kalshi co-founder Luana Lopes Lara personally as a fellow Brazilian and planned to call her to clarify the situation. A person familiar with Kalshi’s review told NPR that Santos does not actually know Lara. The Associated Press also confirmed the referral the following day through a source familiar with the matter who spoke on condition of anonymity, though Santos did not respond to AP requests for comment.
On his podcast after social media users accused him of wrongdoing, Santos said, “I guess people lost money. Some people made unexpected money. That’s to show you how fragile these markets are.”
Playing the market
This latest incident sits inside a wider pattern of insider trading cases tied to prediction markets, and the probe comes as Kalshi, Polymarket, multiple states, and federal regulators intensify efforts to curb this type of activity. Last month, federal prosecutors charged Google software engineer Michele Spagnuolo with using confidential internal search data to trade on Polymarket. Spagnuolo, a 36-year-old Italian citizen living in Switzerland, placed bets between October and December 2025 on which individuals would rank among the most-searched people of 2025. He allegedly profited roughly $1.2 million.
Campaign staffers have described similar practices around election markets. Unnamed staffers from at least two campaigns recently told NPR that they and colleagues used nonpublic internal polling data to place bets before the numbers reached the public. One staffer recounted making thousands of dollars on a single trade. Another observed teammates saying “I’m going to go make a quick $5,000” because they held polling information the markets had not yet absorbed.
In perhaps the most high-profile case of insider trading on prediction markets from April, authorities arrested U.S. Army special forces soldier Gannon Ken Van Dyke on charges stemming from trades on Polymarket. The 38-year-old, stationed at Fort Bragg, allegedly used details from his participation in the planning and execution of the mission to seize Venezuelan leader Nicolás Maduro.
You can bet on tougher enforcement
Platforms and regulators have stepped up enforcement and compliance measures in response to growing concerns around insider trading on prediction markets. Kalshi has continued to monitor trading patterns and refer suspicious activity to federal authorities, as it did in the Santos case, and Polymarket has moved aggressively against users attempting to bypass geographic restrictions. The platform now blocks known VPN IP addresses and, in some cases, requires additional identity verification for large or rapid trading activity. These changes address both location-based rules and anti-money laundering requirements amid restrictions or bans in more than 30 countries, including Spain and Indonesia.
Federal regulators and lawmakers have signaled stronger oversight as well. The CFTC has stated it will pursue insider trading in prediction markets, and the DOJ has brought charges in multiple recent cases. Congress has also advanced multiple bills this year to restrict insider trading on prediction markets by public officials.
Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the “derivative market” of LeBron James rebounds. These prediction markets you are breathlessly defending are gambling—pure and simple. They are destroying the lives… https://t.co/Ohup2x3D8u
— Governor Cox (@GovCox) February 17, 2026
At the same time, a jurisdictional dispute continues between the CFTC and the states. CFTC Chair Mike Selig has asserted exclusive federal authority over these contracts, but state officials, such as Utah Governor Spencer Cox, have pushed back, describing prediction markets as “gambling—pure and simple” that destroy families and vowing to fight any federal expansion of power in court.
Prediction market supporters have long maintained that informed trading, including by those with insider knowledge, actually strengthens the platforms by folding more information into prices and producing sharper probability estimates. Notably, a Federal Reserve report released in February found evidence consistent with the view that the public data produced by these markets can indeed be useful as economic indicators.
