Within the days main as much as the 2026 State of the Union, George Santos was performing—not less than in public—like a person getting ready to take a victory lap. In October 2025, President Donald Trump had commuted the previous Republican congressman’s 87-month federal jail sentence, which he’d acquired in April 2025 after pleading guilty to varied types of marketing campaign funds-adjacent fraud. 4 brief months later, on X, Santos started teasing his triumphant return to the chamber from which he’d been expelled two years earlier.
“I’m going to be there for the State of the Union, within the gallery, guys,” Santos said in a video posted the night time earlier than the primary occasion. “Simply chill, trolls. Chill.” In different tweets, he floated the concept of carrying a “bedazzled” swimsuit to the occasion, earlier than finally telling his followers that he’d opted for a “fundamental” blue or grey quantity as a substitute.
On Kalshi, a prediction market the place customers had been betting on (amongst many other things) whether or not Santos (amongst many other people) would attend the State of the Union, his announcement brought on the price of YES shares to spike. Then got here the plot twist: At about 6 PM on Tuesday, Santos tweeted, “Watching SOTU from an airport television was not a part of the plan!” He added two red-faced emojis, and a rueful three-letter acronym expressing frustration that even essentially the most aggressively on-line millennials stopped utilizing a decade in the past.
Nearly instantly, the value of YES bets on Santo’s attendance tumbled into single-digit territory. Positive sufficient, when Trump started talking, Santos was nowhere in sight.
A serious snowstorm earlier within the week had snarled air journey up and down the East Coast, and on Wednesday, when a Kalshi person complained on X that they’d misplaced cash due to him, Santos blamed an issue with a flight. “Belief me I needed to be there too,” he wrote.
Because it seems, Santos might have discovered a option to make the perfect of a nasty state of affairs. In keeping with NPR, earlier than he despatched that market-flipping tweet, Santos hopped on Kalshi to guess that he would not be on the State of the Union in any case, which earned him a five-figure payout. In consequence, NPR says, Santos is now the topic of investigations by the Commodity Futures Buying and selling Fee, the federal company that regulates Kalshi, in addition to the U.S. Division of Justice, which raises the hilarious chance that Santos, now eight-ish months out of jail, may discover himself again in custody within the not-so-distant future.
Among the many oldest, grimiest traditions in Washington is its revolving-door tradition, which permits outgoing politicians and former staffers to leverage their expertise by taking well-compensated positions inside the identical industries they used to manage. However Santos’s newest alleged moral misadventure is a more moderen type of corruption, made potential by the explosive progress of bet-on-everything platforms that the Trump administration has zero curiosity in meaningfully checking. When buying and selling on entry is that this frictionless, enterprising political varieties with inside data are going to search for methods to show a revenue.
This data arbitrage might be very profitable. In January 2025, a bettor on Polymarket, a Kalshi competitor, netted greater than $300,000 by placing long-odds bets that President Joe Biden would pardon 4 particular people throughout his ultimate hours in workplace. In January 2026, one other Polymarket person made greater than $400,000 on a $32,000 guess that the USA would seize Venezuelan president Nicolas Maduro by the tip of the month. On February 28, 2026, six Polymarket wallets collectively earned greater than a half-million {dollars} by appropriately predicting that the USA army would strike Iran by the tip of that day.
Prediction markets know that tales like these are (to make use of a technical time period) not a superb look. In April, Kalshi suspended the accounts of three candidates who’d wagered on the outcomes of their races, together with one who “predicted” that he would enter the race two months earlier than he did so.
However there’s simply an excessive amount of cash flowing right here to maintain all of the insiders out. In Could, NPR spoke with marketing campaign staffers who had been earning money after seeing not-yet-released data that they knew would scramble the prediction markets. One staffer described taking positions on Kalshi primarily based on a not-yet-released ballot that confirmed their candidate in an unexpectedly commanding lead. “As a result of you have got all this data and data that isn’t publicly accessible but, it’s virtually silly to not guess on it earlier than it’s made public,” they mentioned.
Two years in the past, when Kalshi started rolling out its politics markets to coincide with the 2024 election, I worried that permitting individuals to speculate each emotionally and financially of their most well-liked candidates was one of many few remaining strategies of constructing politics on this nation worse. Within the weeks earlier than Election Day, Trump had supplemented his traditional voter-fraud conspiracy theories with warnings that he would solely lose the election if his enemies rigged it in opposition to him. Provided that Trump supporters responded to his loss in 2020 by storming the Capitol, I don’t think about that they’d have reacted extra moderately if that they had additionally gambled away their life financial savings within the course of.
What stunts like Santos’s present, although, is that the harms of political playing embrace well-timed rug-pulls, along with the tawdry discount of democracy to a yes-or-no guess on whether or not the Supreme Court docket will enable a xenophobic president to revoke the Fourteenth Modification’s assure of birthright citizenship by govt fiat. Because the Polymarket incidents counsel, persons are already making large cash betting on issues they’ve good purpose to imagine will occur. Santos went one step additional: He knew his guess was a positive factor as a result of he may train some management over the end result.
Relative to the deposition of a international head of state or the initiation of a silly and unlawful warfare, a disgraced former lawmaker’s presence at a State of the Union is fairly inconsequential. However it isn’t arduous to think about savvy bettors utilizing the identical fundamental playbook when the stakes are greater. There are markets, for instance, about if and when specific politicians will go away workplace, and the way they’ll vote on particular issues. As soon as they make up their minds, it will not be particularly difficult for them (or somebody near them) to make some cash off all of the rubes on the market who’re simply taking an informed guess.
In principle, this type of insider buying and selling is unlawful. In follow, beneath Trump, the CFTC has been far less interested in scrutinizing prediction markets than in protecting them from anybody who would dare to attempt. Chairman Michael Selig has praised prediction markets as “revolutionary monetary merchandise,” and warned of the hazards of making an attempt to “regulate them away.” Shortly after Minnesota Democratic Governor Tim Walz signed a regulation banning prediction markets, Trump called Walz “SCUM” for difficult the CFTC’s “unique authority.”
The three candidates who wagered on their races did get hit with modest fines and five-year buying and selling bans. However as PBS notes, these had been agreements between the candidates and Kalshi, not punishments imposed by the CFTC or different regulation enforcement company, and the CFTC solely discovered about Santos as a result of Kalshi reported him to it. As ever, permitting industries to police themselves is tantamount to permitting industries to do as they please.
It’s after all not new for individuals who work in politics to have entry to data that’s, within the basic sense, invaluable. However what platforms like Kalshi and Polymarket have executed is commodify that data to a higher extent than ever earlier than, permitting anybody with smartphone entry to revenue off precisely what they know in just some faucets. If in case you have been serious about dabbling in insider buying and selling, now could be the time to attempt, as a result of the possibilities are fairly good that the powers that be gained’t discover out. They most likely aren’t wanting within the first place.
