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Kalshi Bans George Santos for Life Over Alleged Insider Trading on Prediction Market/ TezzBuzz/ WASHINGTON/ J. Mansour/ Kalshi permanently banned former U.S. Rep. George Santos after its compliance department concluded there was reasonable cause to believe he engaged in insider trading involving bets on whether he would attend the State of the Union address. Santos made a $17,839 profit after betting against his attendance despite publicly discussing plans to attend, and Kalshi imposed a $71,356 penalty in its first lifetime ban. Santos dismissed the action as “frivolous nonsense,” while Kalshi also announced temporary bans against three former or current political candidates who traded on markets involving their own campaigns.

Quick Look

• Kalshi permanently banned former Rep. George Santos from its prediction market.
• It is the first lifetime trading ban in the company’s history.
• Kalshi said it found reasonable cause to believe Santos engaged in insider trading.
• The trades involved whether Santos would attend the State of the Union address.
• Santos earned a $17,839 profit after ultimately not attending.
• Kalshi imposed a $71,356 penalty and barred Santos from accessing the platform directly or indirectly.
• Kalshi said Santos was prohibited from trading because he could influence the outcome of the market.
• The company said some of Santos’ public statements about his attendance were “false or misleading.”
• Santos previously agreed to pay $35,000 to settle a federal investigation into the trades.
• Rival prediction platform Polymarket cut ties with Santos in June.
• Santos called Kalshi “an unserious company” and the lifetime ban “frivolous nonsense.”
• Kalshi also announced three-year suspensions involving Laurie Buckhout, Stephen Cloobeck and Ben Midgley.

Kalshi Permanently Bans George Santos

NEW YORK — Online prediction market Kalshi permanently banned former U.S. Rep. George Santos after concluding there was reasonable cause to believe the former Republican congressman engaged in insider trading involving bets on whether he would attend the State of the Union address.

The lifetime ban, which took effect Friday, prevents Santos from accessing the platform either directly or indirectly.

Kalshi also imposed a $71,356 penalty.

Company spokesperson Elisabeth Diana said Santos’ punishment represents the first permanent ban in Kalshi’s history.

Santos Made $17,839 Profit on State of the Union Bets

The case centered on a prediction market that allowed traders to bet on whether Santos would attend the State of the Union.

Santos had repeatedly discussed his intention to attend the address, which took place four months after President Donald Trump granted him clemency in the federal fraud case that had followed his expulsion from the House.

On the eve of Trump’s speech, Kalshi’s market put the probability of Santos attending at nearly 75%.

But minutes after the speech began, Santos posted on X that he had been delayed at the airport.

He did not attend and ultimately earned $17,839 from his trading activity.

His absence and the resulting profit quickly triggered accusations on social media that he had manipulated the market.

Kalshi Says Santos Could Influence Market Outcome

Kalshi’s Compliance Department said Santos should not have traded in the market because he had the ability to determine or influence whether the underlying event occurred.

According to the company’s findings, Santos placed a series of large bets between Feb. 2 and Feb. 25 on whether he would attend the State of the Union.

Kalshi said Santos then made public statements about his potential attendance that could affect the market price.

The company said those circumstances provided reasonable cause to conclude that Santos had engaged in insider trading.

Santos Calls Kalshi Ban ‘Frivolous Nonsense’

Santos did not immediately respond to an email seeking comment Monday, but he publicly attacked Kalshi’s decision on X.

He described Kalshi as “an unserious company” and called its enforcement action “frivolous nonsense.”

The ban adds to the regulatory scrutiny Santos has already faced over the trades.

Santos Previously Settled Federal Investigation

A month earlier, Santos agreed to pay $35,000 to settle a federal investigation by the Commodity Futures Trading Commission over the trading activity.

The federal investigation also prompted rival online prediction market Polymarket to cut ties with Santos in June.

Santos addressed controversy surrounding the State of the Union market on his podcast in March.

Trump Granted Santos Clemency After 84 Days in Prison

The prediction-market controversy followed Santos’ earlier criminal case.

Santos won election to Congress as a Republican after fabricating significant portions of his personal and professional background, including presenting himself as a Wall Street dealmaker.

He pleaded guilty to fraud and identity theft in 2024 and was sentenced to seven years in prison.

Santos served 84 days before Trump ordered his release.

Trump described Santos as a “rogue” but argued that his prison sentence was too severe and said Santos deserved credit for voting with Republicans while serving in Congress.

Kalshi Suspends Three Other Political Candidates

Santos’ lifetime ban was part of a broader series of enforcement actions announced by Kalshi on Monday.

Unlike Santos, the people involved in four other enforcement cases received temporary trading bans because they cooperated with Kalshi’s Compliance Department, according to the company.

Among them was retired Col. Laurie Buckhout, a Republican congressional candidate challenging Democratic Rep. Don Davis in a competitive northeastern North Carolina district.

Kalshi said Buckhout admitted placing bets totaling less than $1,000 on her own campaign.

The company fined her $2,589 and imposed a three-year trading ban.

Former Governor Candidates Receive Three-Year Bans

Kalshi also imposed three-year suspensions on Stephen Cloobeck and Ben Midgley.

Cloobeck, a timeshare businessman who briefly ran for governor of California, purchased $10,000 in contracts to his own candidacy, according to Kalshi.

Midgley, a businessman who briefly sought the Republican nomination for governor of Maine, bet less than $1,000 on his campaign.

Neither man could immediately be reached for comment.

The enforcement actions highlight the challenges prediction markets face when political candidates or other individuals with direct control or influence over an event are able to trade contracts tied to their own actions or campaigns.

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