Consider This from NPR - Unraveling the story about George Santos' insider trading on Kalshi

Episode Date: September 5, 2026

This week, the popular prediction market known as Kalshi banned former Congressman George Santos for life and fined him more than 70-thousand dollars — after he engaged in insider trading on the site.  That came as no shock to NPR technology correspondent Bobby Allyn. Earlier this year, Allyn broke the story that Santos was under investigation by the Justice Department for manipulating the market about whether he would or would not attend this year’s State of the Union address.For Reporter’s Notebook, Allyn talks about how he broke the story and the fallout from it.This episode was produced by Gabriel Sanchez. Our director is Alejandra Marquez Janse.It was edited by Adam Raney.Our interim executive producer is Courtney Dorning.Support public media with NPR+ and enjoy perks for over 25 podcasts like this one. This show’s perks include bonus episodes and sponsor-free listening. Learn more at plus.npr.org.See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

It's Consider This from NPR, where every day we go deep on one big news story. This week, the popular prediction market known as Kalshi did something it had never done before. It banned a trader permanently for insider trading. Specifically, Kalshi banned former Congressman George Santos for life and find him more than $70,000 after he engaged in insider trading on the site. That came as no shock to NPR tech correspondent Bobby Allen. Earlier this year, Bobby broke the story. that Santos was under investigation by the Justice Department

for manipulating the market about whether he would or would not attend this year's State of the Union address. Posted videos about how excited he was to be attending the State of the Union. Now, at the same time, investigators found, Santos was placing bets on Kalshi that he would not be there. And when he never showed up, he made nearly $18,000 in profits. That Santos story is one of many. Bobby has filed recently on prediction market platforms like Kalshi and Polly Market.

Consider this. Prediction markets are increasingly attracting people to bet on almost anything, including political outcomes. What risk could that pose for the midterm elections? From NPR, I'm Joel Rose. Earlier this year, NPR tech correspondent Bobby Allen broke a story about former Congressman George Santos being under investigation for insider trading on the prediction market, Kalshi. And now, Kalshi has permanently banned Santos from their site. So for this week's reporter's notebook, I wanted to talk to Bobby about how he broke the story and the fallout from it. I began by asking him how he got the scoop. In sort of becoming the person who's really been trying to worm into these companies, I often talk to current and former employees of Kalshi.

And in one of those conversations, someone said, you know, there's a certain person who is being investigated and Kalshi doesn't really want to talk about it. And I said, well, who is it? And this person said, well, let's just say they were formally an elected official. And let's just say they wanted to attend an event that Trump was speaking. And I go, okay, say more. And they go, that's all I'm saying. So they gave me sort of some breadcrumbs. And I was digging, digging, digging, digging.

And I found all of the markets on Kaushi that were attendance markets. So will this person attend? Will they not? And I was going through, going through, going through. And I said, wait a minute, there is a state of the union market. I go on to Discord, I put in state of the union market, and I see lots of chatter among the traders who lost a lot of money and were quite upset that George Santos was portraying himself as going to the state of the union. And then last minute, it was revealed that he did not show up. So I called my source back and I go, two words, George Santos.

And this person goes, bingo. I go to the regulators in Washington, you know, Justice Department officials and CFTC officials. They both say, you know, in recent weeks they've opened an investigation. into this. We put it out into the world, and then George Santos, of course, starts spinning off the rails on the internet and really starts coming at me. Yeah, after that story ran, you had a pretty unusual conversation on the phone with George Santos. What was that like? Yeah, I was sort of bracing myself for conversations with him, because if we know anything about George Santos, we know that he is a master manipulator. He spent his whole life lying. He's a serial fabulous. All of these things are

are very well documented, and I knew he would try to play me. So after my story comes out, my phone rings, and I look at it, and it's a blocked number, and I pick it up, and he goes, Bobby George Santos. And I said, hi, what's going on? And he launches into a tirade against me, and it ends with, if you don't stop digging into me, you're going to, you know, you're going to have a gun in your face. And he hung up the phone. And I was just like, did I just hear what I thought I heard? And I texted him and I emailed him and he instantly denied it, instantly said I was making it up. And I was taking notes the whole time and I know exactly what he said. And Joel, that just put me in a really strange situation as a journalist because on one hand, whoa, there's this former congressman who's

making violent threats against me that feels like a news story. That feels notable. On the other hand, this is a guy who wants to be in the headlines. This is a guy who wants more oxygen online, is writing about this, giving him exactly what he wants. And this is a was a real dilemma I was facing. And I called, you know, colleagues at NPR, other people who I trust and was seeking counsel in, like, what should I do with this, right? Yeah, what, so tell me about those conversations. Yeah, I mean, I was just talking to, you know, pretty senior, more seasoned journalists who've been doing this much longer than I have. And most of the advice I got was, look, this guy is a, is a former U.S. congressman, making violent threats against a

journalists for doing their job is not something that we should apologize for, that we should cover up. And if he's done this once, he's probably done it again. You should probably put some sunlight on this. You should probably make this public. And I did and wrote a little essay about the experience and how strange it was. And of course, because the Internet works the way the Internet does, that story was much more well-read than the underlying story about the investigation into his Kalshi trades. But to this day, sometimes George Santos will send me a message or he'll, you know, say something disparaging about me on X.

So he's still sort of kicking around and thinking of me and, you know, saying strange things about me. But I'm not planning to do a story about him any time soon. I mean, I think we should say at some point, too, like he was, you know, pleaded guilty, right, to federal wire fraud and identity theft charges, right? And went to prison. Exactly right. Yeah, exactly right. And it's only because of Trump's. commutation that he was able to win his freedom and leave federal prison. I want to ask about how these prediction markets interact with politics. And I'm thinking, you know, with the midterms

coming up pretty quick here, you know, what are you watching in terms of where these markets collide with elections and with politics? Yeah, this is going to be the first major election where these prediction markets are as mainstream as they are now. And election integrity experts and others who are sort of watching the midterms closely are very fearful about the ways in which these markets can be create an incentive to just sow all sorts of chaos leading up to and during election day. An example would be these markets are very sensitive to, you know, what goes viral on social media and news stories. And, you know, there's a fear that someone will sort of push a piece of misinformation or there'll be some coordinated campaign, whether it's from a

foreign actor overseas or a partisan actor or just a chaos agent, to try to move a market up or down. And because these markets are so sensitive to what's happening on social media and the news, potentially, you can sort of push something online, change the odds and cash out and make money. The other thing, and it's maybe a much more pernicious and sort of chilling hypothetical, is the question of whether poll workers or any election workers will be on prediction markets or any of their family members or associates or whoever and, you know, will intentionally undercount a vote. So it looks like a candidate isn't as, you know, successful as they are. Or they will slow count or undercount or just do something else that will have a direct sort of

connection to how these odds are moving. And then, And then there's the final thing that, you know, many folks are really worried about, which is, you know, the campaigns themselves, you know, getting some early returns, having their own internal polling data, and then using that to try to cash in. And we've already seen that, Joel, in a number of situations in which candidates have placed money on themselves and have been caught doing it and have been suspended from these platforms. And, you know, the thing is, for the longest time, election betting, at this scale has not been allowed in the U.S. It's been illegal. And that is because the CFTC historically has said these are susceptible to manipulation and it undermines the public interest. I mean, if someone goes to the polls, you would think they're going to be placing a ballot based on their political preferences and their policy choices. They're not placing a ballot because they are hoping to make a profit. If the profit motive is the thing that is mobilizing you, there's really something wrong with democracy. And that's been the position of regulators up until this second

Trump administration. NPR tech correspondent Bobby Allen. Bobby, thank you very much for your time. Thanks for, thanks for talking to us. Of course. This episode was produced by Gabriel Sanchez. It was edited by Adam Rainey. Our director is Alejandra Marquez Hansa. Our interim executive producer is Courtney Dorney. It's Consider This from NPR. I'm Joel Rose.