Prediction Markets Under Scrutiny
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Transcript
23 segmentsIt's All Talk. I'm Kevin Deetz. We are on the WJR Pure Michigan Golf Tour. Today we are live from St. John's Resort in Plymouth of the championship golf course, the Cardinal, and home to the 2026 Live Golf Championship. You can find out everything you need to know about the resort, the golf, the dining, the fun by going to St.jons Resort.com. Former Congressman George Santos, who became infamous for fabricating large portions of his biography and was later expelled from Congress, now finds himself at the center of yet another federal investigation. This time, regulators are reporting whether George Santos illegally bet on a prediction market contact involving his own attendance at President Trump's State of the Union address. Join us now as Michael Vallata, federal criminal defense attorney and former federal prosecutor. Good morning, Michael. Good morning, Kevin. And what a perfect golf course for you as a Catholic boy from Brother O. Right? This is a perfect spot for me, and it's gorgeous out here. And all the money that's spent out here goes to help educate. Eat the hungry and that's just a wonderful, wonderful spot to be. Really is, really is great. Are we really surprised here that George Santos is at the center of this type of scandal? Someone that's created a whole persona from scratch. I know people say, yeah, mom dying in 9-11, lied about working at Golden and Sex, a lot about pretty much everything. Yeah, people say it's too crazy to believe. I don't know. I kind of believe it with this guy. George Santos, what a character. It's on brand, Kevin. It's on brand. So what's the accused of doing? I don't know that everybody really understands what a prediction market is. Yeah, let me talk about that a little bit. So a prediction market is, it's kind of like the stock market where you could buy, instead of buying stock, you're buying predictions. You're buying whether or not. You could buy whether or not the Spurs are going to win the NBA finals, but you can also purchase predictions on things like what words are, you know, is George Santos going to use in an interview. That actually was one of the bets that that was out there on the prediction market. So it's like insider, it's like the stock market, but with, with. events that happen that happen in our country or I guess anywhere. You can bet on what inflation will be, what number inflation will rise by a certain date. You can buy these predictions essentially. Yeah, there's been some news reports about, you know, information on the war in Iran, you know, predict. I would say a strike will hit or something like that. And there's been concerns about people leaking military information. That's right. People have been already prosecuted for this kind of thing. There was a U.S. Army Special Forces officer who bet on the capture of Nicholas Maduro of Venezuela because he was in on the capturing him. So he had insider information. So it really opens up a huge.
Pandora's box of potential prosecutions for wire fraud or violations of the Commodities Exchange Act. But that industry is regulated by something called the CFTC, which is the Commodity Futures Trading Commission. Think of it like the SEC, but for commodity futures, and also now for this prediction market. They're regulating the market. So they're saying George Santos may have... been monitoring these prediction markets and there was he was he was predicted to go to the state of the union address because he had been tweeting all week that he was going to do it and then he yeah and then he and then he bet he had a friend bet on it and then he didn't he didn't go or vice versa i mean yeah that seems like not the smartest crime in the world It's not, but it's, like I said, it's on brand. Like, who is going to lie about their mother dying, you know, in a tower 9-11 or his family having a Holocaust victims in it? He just lied about everything. So it's really, like I said, it's not surprising at all. Is it, do you, do you, is legally is it different than, like, sports, if you have sports betting and one of the players is. You know, score over 30 points, and he scores 10 on purpose to invest. It's the same idea. Yeah, it's the same idea. It would be like an NBA player betting on how many free throws he'll make in a game because he can influence and control that. And that's just like George Santos, betting on, you know, whether he's going to go to this state of the union. When he knew he wasn't going to go, he tweeted the day before he was going, but, you know, why would he bet that he wasn't going to go and then go? That would be no sense. Yeah. How, how. I mean, the penalties. Oh, how stiff? Well, what's interesting here is that in fraud cases, like I mentioned wire fraud could be one of the charges. In those kinds of fraud cases like this one, the sentence is driven largely by the loss amount or the gain amount. And so potentially his loss amount could be much more than the tens of thousands that he made in profit. His loss amount could be all the people that bet. that he that purchased contracts on the prediction market calci and maybe other markets too where he he they put money on the fact that he was going to go and he knew that he wasn't so he manipulated the market it was it was a fraud on those people so that could potentially be in the million his loss amount so it could be a lengthy prison sentence if i were his attorney i'd tell him to you know plead guilty as soon as possible and ask for a pardon or commutation of whatever sentence because he's already gotten one yeah keep keep him rolling yeah i mean the the audacity for him to try and pump up the bet by tweeting out that he's going can't wait to go to the state of the union address uh in that place a bet Yeah, not the smartest crime, but then again, we don't always catch the smart. No recourse for people who bet the other way, right? If you're betting in these markets and somebody with the ability to influence it does so, there's nothing you can do, right? You can't sue him civilly, can you? You can see, yeah, absolutely. They could sue George Santos, but what are you going to get? What does he have? He's been convicted of aggravated identity theft for using other people's credit cards because he didn't have any money. So I don't know that you're going to.
recover any money, but you certainly could sue him. It's an intentional tort. It's an intentional violation of these other people. I guess the judge would look at his previous behavior and convictions, right? In sentencing, that could impact it quite a bit. Oh, yes. The last thing you want to do as George Santos's lawyer is wait and push the case over. You want to get it done before this administration is out of office. That will be mine. Would you bet on prediction market? I couldn't ever imagine betting on something like this where it just seems like there's always people out there that can influence the outcome. Sure. Just like the employees at Google recently that were betting on what the most frequent search terms were when they had inside knowledge of what those terms were. It's kind of unfair to view that. Yeah, I guess I'm not even going to go on those sites and look at what people are betting on. I don't want to be influenced. I don't want to be tempted. I don't want to be tempted. I don't want to be tempted. I'm just going to stay away. Michael Ballada, federal criminal defense attorney and former federal prosecutor. Thank you so much. Appreciate your expertise. My pleasure. Yeah, the judge is not going to like this. If he's found guilty of doing this, George Santos, who's already been convicted and then let out of prison back in trouble changing what happens in these prediction markets. I don't know. Do you guys play the prediction markets? I just don't. I can't see myself doing that. All right, hey, it's WJR's Tim McGrath VIP experience. That's your chance to rock when country music legend Tim McGrath brings his pawn show guitar tour to Pine Now Music Theater August 28th. Now, you can win a pair of premium pavilion tickets, transportation, courtesy of metro cars, and $100 to Buddy's Pizza. How to enter? What you've got to do is you need to download our mobile app. And when you download the free WJR mobile app, you're going to find the secret keyword there. And then text that keyword to 800, 859-0957. That will make you eligible for your chance to win a pair of pavilion tickets, transportation, courtesy of metro cars, and $100 to Buddy's Pizza for Tim McGraw, pawn show guitar tour, Pineda Music Theater on August the 28th. Good luck. We are on the WJR Pure Michigan Tour, and today we are live from St. John Resort in Plymouth. It's home of the championship. course, the Cardinal and home to the 2026 Live Golf Championship. You can find out everything you need to know by going to St. John. We'll be right back. It's all talk. I'm Kevin Deetz.