George Santos may be the latest individual caught trading inside information in a prediction market.
According NPRThe US Department of Justice (DOJ) is examining whether the former New York congressman placed bets on Kalshi using non-public 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 published a video on X stating that he would appear at the event. That public confirmation raised the odds of his attendance at Kalshi to about 75% the night before the event, attracting millions of dollars in bets on related markets. However, Santos did not appear at the State of the Union address. During the speech he aware in X that he was watching from an airport television instead. The odds of his attendance collapsed soon after.
‘Some people made unexpected money’
People with direct knowledge of the subsequent commercial activity. said NPR that Santos had bet against his own attendance using information that was not available to the rest of the market, and those bets allegedly 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 Department of Justice. 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 new to him and declined to confirm whether he maintained an account on Kalshi. “I’m not saying yes, I’m not saying no,” he said. He added that he personally knew Kalshi co-founder Luana Lopes Lara as a fellow Brazilian and planned to call her to clarify the situation. A person familiar with Kalshi’s review said NPR that Santos doesn’t really know Lara. He Associated Press also confirmed the referral the next day through a source familiar with the matter who spoke on condition of anonymity, although Santos did not respond to AP requests for comment.
In his podcast after social media users accused him of irregularities, Santos saying“I guess people lost money. Some people made unexpected money. That just goes to show how fragile these markets are.”
Playing in the market
This latest incident is within a broader pattern of insider trading cases linked to prediction markets, and the investigation comes as Kalshi, Polymarket, several state and federal regulators step up their efforts to curb this type of activity. Last month, federal prosecutors loaded Michele Spagnuolo, a software engineer at Google, will use confidential internal search data to operate on Polymarket. Spagnuolo, a 36-year-old Italian citizen living in Switzerland, placed bets between October and December 2025 on which people would be among the most wanted people of 2025. He allegedly won approximately $1.2 million.
The campaign staff has described similar practices around electoral markets. Anonymous employees of at least two campaigns recently said NPR that they and their colleagues used non-public internal survey data to place bets before the numbers reached the public. One staff member reported making thousands of dollars on a single trade. Another watched his teammates say, “I’m going to make $5,000 quickly” because they had survey information that the markets had not yet absorbed.
In perhaps the most high-profile case of insider trading in April prediction markets, authorities arrested Gannon Ken Van Dyke, US Army Special Forces soldier, indicted on charges stemming from transactions at Polymarket. The 38-year-old, stationed at Fort Bragg, allegedly used details of his involvement in the planning and execution of the mission to capture Venezuelan leader Nicolás Maduro.
You can go for a stricter application
Platforms and regulators have stepped up enforcement and compliance measures in response to growing concerns around insider trading in 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 acted aggressively against users who attempt to bypass geo-restrictions. The platform now blocks known VPN IP addresses and, in some cases, requires additional identity verification for large or rapid business activities. 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 also signaled stricter oversight. The CFTC has stated that it will pursue insider trading in prediction markets, and the Department of Justice has filed charges in multiple recent cases. Congress has also introduced several bills this year to restrict insider trading in prediction markets by public officials.
Mike, I appreciate you trying this seriously, but I don’t remember the CFTC having authority over the “derivatives market” for LeBron James rebounds. These prediction markets that you endlessly defend are games of chance, pure and simple. They are destroying lives… https://t.co/Ohup2x3D8u
– Governor Cox (@GovCox) February 17, 2026
At the same time, A jurisdictional dispute between the CFTC and the states continues. CFTC Chairman Mike Selig has asserted that he has exclusive federal authority over these contracts, but state officials, such as Utah Governor Spencer Cox, have pushed backdescribing prediction markets as “games of chance, pure and simple” that destroy families and vowing to fight any expansion of federal power in the courts.
Supporters of the prediction market have long argued that informed trading, even by those with inside knowledge, actually strengthens platforms by incorporating more information into prices and producing more accurate probability estimates. Notably, a Federal Reserve report released in February found evidence consistent with the view that public data produced by these markets can be useful as economic indicators.
