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- Prediction market operator Kalshi issued its first-ever lifetime ban and a $71,356 penalty against former Rep. George Santos, finding that he manipulated prices on State of the Union attendance contracts through misleading public statements.
- Kalshi also handed down three-year trading suspensions and financial penalties to three political candidates—Stephen Cloobeck, Ben Midgley, and Laurie Buckhout—after determining they improperly wagered on event contracts tied directly to their own political campaigns.
Kalshi said it has issued its first-ever lifetime ban to former Rep. George Santos after finding he manipulated prices on contracts tied to his public statements.
The action matters because it shows how the U.S. prediction market operator is policing market integrity as scrutiny of political event contracts continues. Kalshi also announced penalties against three political candidates it said bet on their own races, alongside prior enforcement by the Commodity Futures Trading Commission against Santos.
Kalshi says Santos manipulated State of the Union-related contracts
According to Kalshi’s regulatory filings, Santos made public statements about attending the State of the Union address and then traded on the related contract. The company said it found he made those statements “with the intent to manipulate the price of the Yes or No contracts that he intended to purchase” and that the statements “did in fact manipulate the price of said contracts.”
Santos responded on X, writing: “Hey @Kalshithanks for the lifetime ban from your gambling platform. Let’s see how much longer you guys are around for.”
The case had already drawn federal regulatory attention. The CFTC previously imposed penalties on Santos, including disgorgement of winnings and a $17,500 fine, according to the source report.
Three candidates also penalized for betting on their own races
Kalshi also said Ben Midgley, Stephen Cloobeck, and Laurie Buckhout were penalized for wagering on contracts tied to their own candidacies.
In its filings, the company said all three “qualified as a decision maker for the contract and had direct influence on the outcome of the Underlying event.” Kalshi said Cloobeck purchased approximately $10,000 worth of contracts related to his own candidacy.
Cloobeck was suspended from direct or indirect access to Kalshi for three years and hit with a $31,770 financial penalty. Midgley and Buckhout each wagered less than $1,000, received penalties of a few thousand dollars, and were also suspended for three years.
Kalshi said all three candidates cooperated with its investigation.
What to watch in prediction market compliance
The announcement adds to a growing record of internal enforcement by Kalshi involving political contracts. ABC News previously reported that Kalshi had penalized three other political candidates for wagering on their own races.
For the broader prediction market sector, the immediate takeaway is that Kalshi is publicly documenting sanctions for conduct it says undermines contract integrity, including market manipulation and trading by people with direct control over an outcome.
Source: As reported by Lucien Bruggeman.
