Kalshi Issues Lifetime Ban on Santos
Prediction market platform Kalshi has permanently suspended former S. Rep. George Santos, marking the first lifetime ban the company has imposed on a user. The action, announced on Friday, follows an investigation into Santos's trading on event contracts related to his attendance at President Donald Trump's State of the Union address on Feb. 24.
According to Kalshi, Santos was prohibited from trading in the market because he could influence the outcome of the underlying event. The company alleged that Santos "placed a series of large trades in a market where the underlying contracts depended upon his own attendance at the event" from Feb. 2 to 25. Kalshi also said Santos made "a series of public statements regarding his attendance at the event in an attempt to influence the price of Yes and No contracts," some of which were "false or misleading."
"The Compliance Department found that Santos made these statements with the intent to manipulate the price of the Yes or No contracts that he intended to purchase. Ultimately, these statements did in fact manipulate the price of said contracts," Kalshi alleged, adding that Santos "materially benefited from his trading activity, profiting $17,839.57."
The company's rules explicitly prohibit trading by any decision-maker with influence on the outcome of a contract's underlying event, regardless of the scale or importance of that influence.
In addition to the lifetime ban, Kalshi imposed a $71,356 penalty on Santos. The ban and penalty were announced in separate notices of settlement of disciplinary action on Friday, which also detailed action against North Carolina congressional candidate Laurie Buckhout.
Buckhout Receives Three-Year Suspension
Kalshi suspended Buckhout, who is running in North Carolina's 1st congressional district, for three years and imposed a $2,590 penalty. Kalshi's compliance department said Buckhout "announced her candidacy for public office and was added as a market option for a contract on a North Carolina Congressional election." The investigation found Buckhout used insider information for trading on event contracts that could be manipulated by her own actions.
Buckhout reportedly called her actions a "dumb mistake" and "cooperated with the inquiry," agreeing to the three-year trading ban and penalty. Kalshi still lists event contracts related to Buckhout's race, giving Democratic incumbent Don Davis a 63% chance over the Republican's 41%.
Santos Response and Regulatory Background
Santos responded to the ban on Monday with a post on X: "Hey @Kalshi thanks for the lifetime ban from your gambling platform. Let's see how much longer you guys are around for." He also called Kalshi an "unserious company."
The ban follows a previous penalty from the Commodity Futures Trading Commission (CFTC), which fined Santos more than $35,000 in July for trading related to his attendance at Trump's State of the Union address. Santos did not admit to the allegations but agreed to pay the penalties.
The CFTC has been active in the prediction market space. Last month, the agency invoked emergency authority to oppose New York's attempt to bar Kalshi from offering certain contracts. CFTC chair Michael Selig claims the agency has "exclusive jurisdiction" over prediction markets. In a separate case, President Trump's teleprompter operator, Gabriel Perez, was fined $172,000 by federal regulators after trading event contracts on Kalshi related to Trump's speeches.
Kalshi's actions come at a time when prediction markets face scrutiny from state and federal lawmakers over concerns that some event contracts are susceptible to manipulation.