Polymarket cuts ties with George Santos as regulators probe trades on rival prediction market

Rep. George Santos, R-N.Y., talks to reporters as House Republicans hold a caucus meeting at the Capitol in Washington, Oct. 13, 2023. (AP Photo/Mariam Zuhaib, File)

NEW YORK — The online prediction platform Polymarket is ending its paid relationship with George Santos as U.S. federal regulators investigate whether the former congressman illegally bet against his own attendance at U.S. President Donald Trump’s State of the Union.

Santos placed the bets on another prediction marketplace, Kalshi, after publicly announcing his intention to be at the Feb. 24 speech, according to a person familiar with the investigation. He later blamed a delayed flight for missing the event.

The suspicious trades were detected by Kalshi and referred to the Commodities Future Trading Commission, which has opened a probe into Santos for possible insider trading, according to a second person familiar with the investigation.

Both spoke to The Associated Press on the condition of anonymity because they were not authorized to discuss the matter publicly.

By the time of the State of the Union address, Santos was already working in an influencer capacity for Polymarket, using his substantial online platform to promote the controversial brand. He was released from federal prison last October after Trump granted him clemency in a fraud case.

In response to an inquiry from the AP, a Polymarket spokesperson said the company was in the process of terminating the contract as a result of this week’s revelations.

Santos did not respond to phone calls and text messages from the AP.

On his podcast, “Doing Time with George Santos,” the former congressman has spoken about his involvement in prediction markets, which he called “easily manipulable.”

“There’s definitely some space for speculation. There will be investigations. There will be scrutiny,” he said in March. “I just want to make sure that people understand: It is not straightforward. It is not a crime to do prediction market.”

He continued: “I think it’s fun and you can make a little money and you can have fun with it, but just understand that there will always be advantaged players in this game and it’s very hard to understand who they are.”

Santos won election to Congress in 2022 after campaigning using a fake persona as a wealthy, self-made Wall Street dealmaker, when he actually had no background in finance and was struggling to pay his rent.

He was expelled from U.S. Congress and pleaded guilty to wire fraud and identify theft in a criminal case involving stealing money from donors, using some of it on personal expenses including designer clothing.

Sentenced to more than seven years in prison, Santos served 84 days before Trump commuted his sentence.

Jake Offenhartz, The Associated Press