Former Representative George Santos (R-N.Y.) has reached a settlement with the Commodity Futures Trading Commission (CFTC) over his use of the prediction market platform Kalshi to wager on whether he would attend President Trump's State of the Union address in February. The agency announced the agreement on Friday, which requires Santos to pay a total of $35,000 and accept a three-year ban from trading in CFTC-regulated markets.
According to the CFTC, Santos placed bets on his own attendance at the address, while simultaneously posting on social media about his plans, which the agency said could have influenced the market. He ultimately profited by more than $17,500 from the trades. As part of the settlement, Santos will forfeit those winnings and pay an additional $17,500 penalty.
His attorney, Joseph Murray, emphasized that Santos did not admit any wrongdoing. In a statement, Murray said that Santos "agreed to resolve the CFTC's inquiry and to put this matter behind him," and that the settlement "should not be mistaken for an admission of any wrongdoing." Murray also noted that Santos chose a "prompt, practical resolution rather than protracted, costly litigation."
The incident unfolded in the days before the February address. Santos initially wagered that he would attend, and then posted on social media asking for advice on what to wear, which coincided with a rise in the price of the contract. He sold that position for a profit, according to the CFTC.
However, bad weather led to the cancellation of his flight to Washington. Santos posted about his travel difficulties but later said in a video that he would still attend. He then began shifting his wager toward the outcome that he would not be present. After his train reservation was also canceled, he did not publicly disclose that development, and on the day of the address he revealed he was stuck at the airport and would not make it, securing nearly $14,400 in additional gains.
Santos's attorney argued in a press release that the State of the Union wager was Santos's first foray into prediction markets and that he genuinely intended to attend. The release stated, "Mr. Santos concealed neither his intention to attend, nor his change of plans to not attend the SOTU, from anyone," and asserted there was "absolutely no intent to deceive any person, nor intent to manipulate any market."
Santos was expelled from Congress in 2023 following a series of scandals, and later pleaded guilty to multiple counts of wire fraud and aggravated identity theft. He served three months in prison before President Trump commuted his sentence in October. This settlement adds another legal chapter to his turbulent post-Congressional career, which has also included joining a reality TV show.
The case highlights the growing scrutiny of prediction markets, which have faced regulatory challenges. For instance, New York has sued Kalshi over similar concerns. The CFTC's action against Santos serves as a warning that betting on political events can carry serious legal consequences when it involves attempts to influence outcomes or conceal information from market participants.
