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- Kalshi issued its first lifetime ban and a $71,356 fine against U.S. Rep. George Santos for manipulating political-event contract prices.
- Santos earned $17,839 by making misleading statements to move market prices before betting he would miss the address.
Kalshi has permanently banned former U.S. Rep. George Santos and fined him $71,356 after alleging he manipulated a market on whether he would attend Donald Trump’s State of the Union address.
The action matters because Kalshi said it is the first permanent ban in the company’s history, making it a notable enforcement step for a U.S. prediction market operator as scrutiny around political-event contracts continues.
Kalshi said its compliance department found reasonable cause to believe Santos manipulated betting prices and engaged in insider trading tied to contracts on whether he would attend the speech. According to the company, Santos made false or misleading statements intended to move the price of “Yes” and “No” contracts before trading on that information.
Kalshi said Santos ultimately made a profit of $17,839 after he did not attend the address.
In a statement cited by the company, Kalshi said: “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.”
Santos mocks ban as Kalshi details allegations
Santos publicly mocked the decision in posts on X. He wrote, “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” and described the ban as “frivolous nonsense.”
The source article said Santos, who was expelled from Congress in 2023, had been facing a federal fraud investigation.
Kalshi said the conduct at issue took place between Feb. 2 and Feb. 25, when Santos allegedly placed several large bets in the market tied to his attendance. On the eve of Trump’s speech, the article said the market implied a 75% chance that Santos would attend.
Kalshi also announces other bans tied to political betting
Kalshi said Monday’s enforcement announcement also included action against other political candidates.
North Carolina congressional candidate Laurie Buckhout received a three-year ban and a fine, according to the article. Kalshi said Buckhout admitted placing bets of less than $1,000 on her own campaign. Buckhout said, “I bet on myself. Literally. It was a dumb mistake, and as soon as I learned there was an issue, I worked to make it right.” She added, “Safe to say my career as a Kalshi trader was short-lived.”
The company also announced separate three-year bans for failed gubernatorial candidates in California and Maine. Kalshi spokesperson Elisabeth Diana said people involved in four other new enforcement cases announced Monday would be temporarily banned from trading because they cooperated with the probe.
What comes next is less clear. The source article did not say whether Santos or the other individuals plan to challenge Kalshi’s decisions, or whether any regulator or law enforcement agency has opened a separate case tied to the trading allegations.
Source: As reported by livemint.com.
