Former U.S. Rep. George Santos, a Republican, called Kalshi a “predatory app” after settling federal allegations that he manipulated a prediction market tied to an event he personally controlled.
On July 31, the Commodity Futures Trading Commission announced that Santos agreed to surrender $17,569.98 in profits, pay a $17,500 civil penalty, and accept a three-year trading ban. Santos resolved the case without admitting the findings or conclusions in the CFTC’s order. He was not criminally charged in connection with the trades.
The disputed Kalshi market asked whether Santos would attend President Donald Trump’s 2026 State of the Union address. Critics claim the settlement does not effectively deter alleged prediction market misconduct. A settlement appears to be the likely outcome in a similar case involving a White House teleprompter operator.
Santos’ Alleged Conduct
According to the CFTC, Santos opened a Kalshi account shortly before the event and traded exclusively on his own attendance. While holding contracts that would gain value if he appeared, Santos asked his social media followers what he should wear to the event.
The price of a contract predicting his attendance subsequently rose from 15 cents to 70 cents. Santos then sold 30,874 contracts for a profit of approximately $3,448.
Santos later began accumulating contracts predicting that he would not attend. The CFTC said his flight and train reservations had been canceled, but he continued publicly indicating that he planned to appear.
“I am going to be there for the State of the Union in the gallery, guys,” Santos said in one video cited by the commission. Roughly 40 minutes later, he began building his opposing position.
On the day of the speech, Santos posted that watching the address from an airport television “was not part of the plan.” The price predicting his attendance fell from 73 cents to two cents, increasing the value of his position that he would not appear. He ultimately made approximately $14,391 from those contracts.
The CFTC concluded that Santos made misleading statements and omissions to influence prices for his financial benefit.
Santos Now a Kalshi Opponent
Despite the penalty for his own conduct that may have cheated ordinary Americans out of money, Santos blasted Kalshi for allegedly harming its users. He praised New York’s lawsuit against Kalshi.
“If Gov Hochul continues down this path [against Kalshi], I’ll move back to NY and vote for her,” Santos wrote on X. “Kalshi is a predatory app praying [sic] on young men and creating a gambling addiction. Kalshi does flat out sports betting.”
On the same day the CFTC announced the Santos settlement, New York Attorney General Letitia James and Gov. Kathy Hochul sued Kalshi. The state alleges that Kalshi operates an illegal gambling business.
Santos made at least three public statements slamming Kalshi following the New York lawsuit.
