George Santos is the target of new investigation for betting irregularities

Former New York congressman George Santos, the son of Brazilian parents, arrested last year on federal fraud charges after being removed from Congress, is now under investigation for trading in betting markets, according to two sources familiar with the matter.

Forecasting site Kalshi has identified suspicious activity in a market regarding whether or not the former Republican congressman will attend this year's State of the Union address, according to one of the sources.

Users of the site bet millions of dollars on who would attend US President Donald Trump's speech, including Santos; the president's son, Barron; American hockey star Jack Hughes; and Nick Shirley, the Trump-supporting journalist whose report on fraud in Minnesota went viral.

The former deputy had publicly declared before the speech that he would attend, but ended up not going.

The source stated that the site identified that one of the accounts betting on his presence belonged to Santos himself. Then the account was frozen and the case was referred to the Department of Justice and the CFTC (Commodity Futures Trading Commission).

A separate source confirmed that the CFTC, which regulates prediction markets, is investigating the matter.

CNN contacted him. The website did not comment on the matter.

The federal investigation into Santos' negotiations was first reported by NPR. The former congressman told NPR he was not aware of any investigation into insider trading.

NPR reported that the Justice Department is also investigating the case. CNN has contacted the Department of Justice.

Santos was serving a seven-year sentence for aggravated identity theft and wire fraud related to his 2022 midterm election campaign when Trump commuted his sentence last year. He spent less than three months in prison.

Prediction markets like Kalshi and Polymarket have exploded in popularity over the past year, allowing anyone to bet on just about anything, from sports and elections to who will win the 50th season of "Survivor."

These markets are treated like commodity futures contracts and regulated by the federal government, but many legislators and state officials say the rules have not kept up with the reality of the exponentially growing sector.

CNN has a partnership with Kalshi and uses its data to cover major events, but CNN newsroom employees are not allowed to trade on forecasting sites.

Source: CNN