Former Republican US Representative George Santos has become the first user handed a lifetime ban by the prediction-market platform Kalshi, according to the Wall Street Journal. The permanent suspension, announced Monday alongside a $71,356 fine, stems from federal regulatory accusations that Santos profited from insider wagers on his own attendance at Donald Trump’s State of the Union address.
The State of the Union Wagers and Regulator Action
According to the Commodity Futures Trading Commission (CFTC), Santos exploited stormy weather forecasts that threatened his travel from New York to Washington in February. The federal agency stated that Santos bought Kalshi contracts predicting he would miss the speech, then posted social media updates implying he planned to attend anyway. That maneuver drove up the value of opposing contracts he held, allowing him to cash out with more than $17,000 in winnings, as reported by the Wall Street Journal and MS NOW. Under Kalshi Exchange Rule 5.17(z), users are strictly prohibited from trading in markets where they can influence the underlying outcome, according to a company statement cited by MS NOW.
Enforcement and Escalating Penalties
While the CFTC reached a settlement with Santos in July requiring him to pay over $35,000 and barring him from trading on any platform for three years, Kalshi escalated the punishment. A Kalshi spokeswoman told MS NOW that Santos’s refusal to cooperate fully with the platform’s internal investigation pushed the penalty from a temporary suspension to a permanent ban. Santos took to X to address the disciplinary action. “Hey @Kalshi, thanks for the lifetime ban from your gambling platform. Let’s see how much longer you guys are going,” he wrote, according to the Wall Street Journal. In subsequent posts highlighted by MS NOW, Santos dismissed the company as unserious and claimed the platform violated its own notification deadlines.
Broader Crackdown on Prediction Markets
The penalty against Santos arrives as federal authorities ramp up scrutiny of potential insider trading across online prediction markets. According to the Wall Street Journal, the CFTC recently penalized Gabriel Perez, a White House teleprompter operator, who agreed to pay $65,000 and forfeit over $107,000 in winnings. Federal authorities are also preparing cases against an American government official and a KPMG employee, the Journal reported. Alongside the Santos ruling, Kalshi disciplined four other users on Monday. According to the Guardian and MS NOW, North Carolina congressional candidate Laurie Buckhout received a three-year ban and a $2,590 fine for wagering on her own race. Former Planet Fitness President Ben Midgley and Diamond Resorts founder Stephen Cloobeck faced similar multi-year suspensions and financial penalties for betting on their respective political campaigns.
Did you know? George Santos was expelled from the House of Representatives in December 2023 after an ethics committee report detailed extensive fabrication of his biography and misuse of campaign funds. He later pleaded guilty to federal wire fraud and identity theft charges.
Frequently Asked Questions
Why was George Santos banned from Kalshi?
Kalshi issued a lifetime ban and a $71,356 fine because Santos traded on prediction markets tied to his own attendance at the State of the Union address and failed to cooperate with the platform’s internal investigation, according to the Wall Street Journal and MS NOW.
How much money did Santos make from the wagers?
The CFTC concluded that Santos profited more than $17,000 from the February prediction-market trades.
What other penalties has Santos faced?
In July, Santos agreed to pay more than $35,000 to settle a CFTC inquiry, which included a three-year trading ban across all platforms. He was also expelled from Congress in 2023 and subsequently convicted on federal wire fraud and identity theft charges.
Who else was penalized by Kalshi?
On Monday, Kalshi also issued three-year bans and fines to political figures and executives including Laurie Buckhout, Ben Midgley, and Stephen Cloobeck for wagering on their own political bids.
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