Kalshi said on Monday it barred George Santos for life and imposed a $71,356 penalty, calling it the first action of this kind on the platform. The company says Santos placed bets on Kalshi about whether he himself would attend this year's State of the Union. In the run-up to President Donald Trump's February address, Santos allegedly cleared more than $17,000 on those bets.
According to a disciplinary notice, Santos "began making a series of public statements regarding his attendance at the event in an attempt to influence the price of Yes and No contracts, respectively. Some of these included false or misleading statements." Kalshi said that conduct violated its prohibition on trading using non-public information.
Days before the speech, Santos posted on X: "I'm going to be there for the State of Union in the gallery, guys." On the day of the address, he said on X that he was watching from the airport.
Kalshi said it identified his trading and referred him to federal investigators. Santos pushed back on X on Monday: "Hey @Kalshi thanks for the lifetime ban from your gambling platform. Let's see how much longer you guys are around for," closing with a kiss-mark emoji.
After Kalshi's referral, in July the Commodity Futures Trading Commission directed Santos to pay $35,000 over trades tied to State of the Union attendance and prohibited him from trading for three years. At the time, Santos posted his lawyer's statement, which said he settled without admitting to the CFTC's findings.
Santos served New York's 3rd Congressional District starting in January 2023 and was expelled from the House before the year ended. Even before he was sworn in, questions had surfaced about his biography. A House Ethics Committee report later found "substantial evidence of wrongdoing." He was the first member expelled from the House in over two decades.
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Santos had also received an 87-month prison sentence for aggravated identity theft and wire fraud, which President Donald Trump commuted last fall. In June, during the federal probe, Polymarket ended a paid arrangement under which Santos acted as an online influencer for the platform.
Also on Monday, Kalshi announced settlements with three political candidates who had placed trades on markets linked to their own campaigns: a California gubernatorial candidate, a Maine gubernatorial candidate, and a North Carolina congressional candidate. All three must pay penalties and are barred from Kalshi for three years. The company said the trio cooperated with its investigations, unlike Santos.
The gubernatorial hopefuls in California and Maine lost their races. In North Carolina, Laurie Buckhout is the Republican nominee in the 1st Congressional District and will face Democratic incumbent Rep. Don Davis. Buckhout must pay a penalty of slightly under $2,600 related to her trades.
"I bet on myself. Literally," Buckhout said in a statement. "It was a dumb mistake, and as soon as I learned there was an issue, I worked to make it right. Safe to say my career as a Kalshi trader was short-lived."
Prediction markets run on trust, rules, and clean information. Kalshi's move to expel a high-profile user and penalize others shows it will act when a participant can influence an outcome or trade on inside knowledge.
For investors, that means two things: event markets move on more than headlines, and enforcement by platforms and regulators can reshape participation and pricing. Oversight remains active - and penalties can pile up over time.
