CFTC Fines George Santos $35K for Manipulating State of the Union Prediction Market
The regulator said the former congressman made misleading public statements about attending President Trump's speech while trading contracts tied to the outcome.
The Commodity Futures Trading Commission (CFTC) has fined former U.S. Rep. George Santos roughly $35,000 after concluding he manipulated a Kalshi prediction market tied to his attendance at the 2026 State of the Union address.
Under a settlement announced Friday, Santos must disgorge $17,569.98 in unlawful trading profits and pay a $17,500 civil monetary penalty. Santos also agreed to a three-year ban from trading on CFTC-regulated markets. Santos neither admitted nor denied the agency’s findings.
The settlement concludes a CFTC investigation that began after Kalshi identified suspicious trading activity in the State of the Union market in February.
CFTC Says Santos Misled Traders While Betting on Himself
According to the settlement order, Santos traded contracts on Kalshi’s market asking whether he would attend President Donald Trump‘s Feb. 24 State of the Union, contracts whose outcome he could directly influence.
Between Feb. 12 and Feb. 25, he placed both “Yes” and “No” positions while making multiple public statements on X about his travel plans and attendance. The CFTC said Santos repeatedly made material misrepresentations and omitted key information that affected market prices.
Built and Cashed Out a ‘Yes’ Position
According to the order, Santos accumulated 30,874 “Yes” contracts by Feb. 22, when he asked followers on X whether he should wear a “muted or serious suit” or a “bedazzled one” to the State of the Union. Hours later, the price of the “Yes” contracts rose from $0.15 to $0.70. Later that day, Santos sold his contracts and made a $3,448.43 profit.
The order says that after his flight to Washington, D.C., was canceled, Santos did not disclose the cancellation or his exit from the “Yes” position. Instead, he made a train reservation and later posted that travel disruptions could prevent lawmakers from reaching the event, causing the price to fall from $0.63 to $0.28.
Later that day, Santos posted a video saying, “I’m going to be there for the State of the Union in the gallery, guys.” After his post, the market price rose again to $0.70.
Then Shifted to a Large ‘No’ Position
After publicly stating he would attend the event, Santos began building a large “No” position, according to the CFTC.
About an hour after he began building the “No” position, Santos’ train reservation was canceled because of the weather. The CFTC order said he did not disclose that cancellation while continuing to publicly state he would attend the event.
On the day of the State of the Union, Santos posted that he was watching Trump’s speech from an airport television, causing the price of “Yes” contracts to collapse and allowing him to profit $14,390 from his “No” position.
By that point, both his flight and train reservations had already been canceled, and he had not purchased alternative transportation. The CFTC found Santos profited $17,569.98 from the scheme. The agency also noted that he cooperated with the investigation, helping to resolve the matter quickly.
Santos Blasts Kalshi While Defending His Conduct
Following the settlement late last week, Santos launched a series of posts criticizing Kalshi and urging regulators to classify prediction markets as gambling.
Among other comments, Santos called Kalshi “a bona fide gambling website.” He praised New York Attorney General Letitia James’ lawsuit against the company and wrote that all 50 states should regulate Kalshi as a gambling platform.
In another post, Santos called for Kalshi to lose what he described as the “protection veil” of contract swaps.
In a statement through his attorney, Santos maintained that he never intended to manipulate the market. The statement said he genuinely intended to attend the State of the Union but was unable to travel due to severe weather that disrupted both his flight and train reservations.
Santos chose to settle the case without admitting wrongdoing to close the matter quickly, and the CFTC recognized his cooperation during the investigation, according to the statement.
However, the CFTC’s investigation states Santos failed to disclose when his flight and train reservations were canceled while he continued to make public statements suggesting he would attend the event.
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