The prediction market Kalshi permanently banned former U.S. Rep. George Santos (R-N.Y.) from its platform and issued a $71,356 financial penalty. In disciplinary filings published Monday, the company stated the actions resulted from Santos’s failure to cooperate with an investigation into wagers he placed regarding his attendance at the State of the Union address in February. The firm's compliance team concluded there was reasonable cause to believe the former lawmaker participated in unlawful trades.
The ban follows a prior referral by Kalshi to the U.S. Department of Justice in June after the company identified unusual account activity. According to the Commodity Futures Trading Commission (CFTC), Santos placed bets on whether he would attend President Donald Trump’s address while simultaneously posting on social media about his potential plans. The CFTC reported that Santos realized approximately $17,500 in profits from these trades by adjusting his positions as his circumstances changed.
The trades involved Santos wagering he would attend the event and then posting about his wardrobe. After bad weather and travel difficulties prevented his travel, he shifted his bets toward his non-attendance. While he informed the public he would not make it on the day of the address, he had already exited his positions for a gain. Last month, Santos settled a federal probe into the matter, agreeing to forfeit his winnings, pay a $17,500 fine, and accept a three-year trading ban from the CFTC.
For the broader public and users of prediction markets, this case marks an attempt by private platforms and federal regulators to address "insider trading" or market manipulation within the industry. The use of a lifetime ban sets a precedent for how prediction platforms intend to handle participants who utilize non-public information or public platforms to influence the value of their own wagers.
Following the announcement on Monday, Santos criticized Kalshi on the social media platform X, calling it an "unserious company" and accusing it of violating its own 30-day notice period. A source familiar with the matter told The Hill the actual notice period was 15 days. While the CFTC's three-year ban is already in effect, the lifetime ban from Kalshi is permanent. The matter was previously referred to the Department of Justice, though no further legal updates regarding that referral were reported on Monday.