George Santos said he would attend the 2026 State of the Union. He was also betting on Kalshi that he would skip it. Regulators have now fined him $35,000.
He made $17,570 on that bet. He kept the money for about five months. Now he has to give all of it back.
He Bet Against Himself, and Won
Kalshi is a US exchange where people trade contracts on real events. Federal derivatives rules cover it, not state gambling rules.
The contract was simple. It asked who would show up at the State of the Union. Santos traded it between February 12 and February 25.
While he held those bets, he posted about his plans on X. The US Commodity Futures Trading Commission (CFTC) says those posts were misleading. Its order came out Friday.
Prices then moved his way. He walked away with $17,569.98. He now owes that back, plus a $17,500 fine.
He is also banned from trading for three years. He admitted nothing.
This is not his first problem. Congress expelled Santos in 2023. Trump commuted his fraud sentence last year.
Kalshi Caught It in Seconds
No regulator spotted this first. The exchange did, and so did other traders. Kalshi CEO Tarek Mansour described how fast it happened.
“within seconds it was flagged by our system. We opened investigations and within minutes we had like a hundred whistleblower complaints,” Axios reported, citing Tarek Mansour, Kalshi CEO.
That speed is the real story here. On a stock exchange, staff dig through records weeks later. On these markets, the people holding the other side notice immediately.
They have every reason to look. Their own money is at stake. Most Kalshi traders lose as it is, so they watch each other closely.
Regulators are circling too. In February, the CFTC said it would go after insider trading and manipulation on markets like these. Former officials had warned about weak oversight earlier.
Kalshi has since punished three congressional candidates who bet on their own races. A White House teleprompter operator lost his job in July. Reports said he won over $100,000 betting on Trump’s speeches.
Santos Says He Did Nothing Wrong
His lawyer, Joseph W. Murray, says the deal proves nothing.
“Mr. Santos has settled without admitting any of the Commission’s allegations, findings, or conclusions,” Joseph W. Murray, via MS NOW.
Kalshi is running its own case against him as well. If it collects any money, it says it will try to repay the traders he beat.
The timing is awkward, though. New York sued the company on the same day. The state calls it illegal gambling and wants up to $36 billion.
Kalshi says it is a regulated exchange, not a casino. It is fighting that case while chasing a $40 billion valuation.
Catching Santos in seconds may be the best argument it has.