Prediction market platform Kalshi has permanently banned former U.S. Representative George Santos, marking the first time the platform has issued a lifetime ban against an individual. According to a disciplinary settlement notice filed Monday, Santos violated platform rules by trading contracts tied to whether he would attend the State of the Union, or SOTU, and was fined more than $71,000. The case had already drawn scrutiny from the U.S. Commodity Futures Trading Commission, which accused Santos of using his public statements in the two weeks before the SOTU to influence prices in related event contracts. Santos later reached a separate $35,000 settlement with the regulator. His lawyer said Santos had booked a hotel and flight to Washington at the time because he believed he would attend. The case comes as concerns about insider trading in the fast-growing prediction market sector continue to build, with Kalshi and Polymarket among the platforms adopting compliance measures such as employment verification for traders in sensitive markets.
Prediction market platform Kalshi has permanently banned former U.S. Representative George Santos, the first lifetime ban the platform has imposed on an individual.
According to a disciplinary settlement notice filed Monday, Santos broke platform rules by trading contracts on whether he would attend the State of the Union, or SOTU. Kalshi fined him more than $71,000.
Earlier, the U.S. Commodity Futures Trading Commission, or CFTC, accused Santos of using his public statements in the two weeks before the SOTU to influence prices in related event contracts. He later reached a separate $35,000 settlement with the regulator.
Santos' lawyer said he had booked a hotel and flight to Washington at the time because he believed he would attend the event.
Santos represented New York in the House of Representatives from January 2023 until the end of that year. He was later expelled over ethics violations.
The case lands as prediction markets have grown into a sector worth tens of billions of dollars, drawing more attention to insider trading risks. The CFTC recently fined former White House teleprompter operator Gabriel Perez $172,000 after saying he profited in Kalshi's "mention markets" by using advance access to the contents of a Trump speech.
Lawmakers have introduced several bipartisan bills aimed at restricting trading based on nonpublic information, but none has passed. Kalshi and Polymarket have responded with safeguards including employment verification for traders participating in sensitive markets.
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