Prediction market platform Kalshi announced disciplinary actions on August 31 against former New York Republican Congressman George Santos, permanently prohibiting him from using the platform directly or indirectly and imposing a $71,356 fine. A company spokesperson confirmed this marks the first lifetime ban since Kalshi's inception, with the prohibition taking effect last Friday. Santos retains the right to appeal the decision to the Commodity Futures Trading Commission (CFTC).
Responding on social media, Santos wrote: "Thank you Kalshi, your gambling platform, for the lifetime ban. Let's see how much longer you can last." His attorney, Joseph Murray, declined to comment on the lifetime ban. In July, during the CFTC settlement, Murray had stated his client paid to avoid a lengthy and costly litigation process, adding it "should not be mistaken for an admission of any wrongdoing." Santos himself has not admitted to any unlawful trading activities.
The core of the case: betting on his own absence and posting misleading statements
Kalshi's compliance department stated there was sufficient reason to conclude Santos engaged in insider trading. The sanctions targeted a set of contracts traded between February 2 and 25, 2026, which were based on whether Santos himself would attend then-President Trump's State of the Union address that year. Platform rules explicitly prohibit individuals capable of influencing an event's outcome from trading in related markets. Despite this, Santos placed several substantial wagers and subsequently made public statements regarding his attendance plans. The company determined that some of his statements were false or misleading, designed to influence the prices of both "yes" and "no" contracts. Ultimately, Santos did not attend the address, yielding a profit of $17,839 from the trades.
The CFTC's July settlement filing revealed a more detailed trading path: after severe weather disrupted his travel plans, Santos bought contracts betting he would not attend; he then posted on social media suggesting he might still appear; subsequently, he sold the contracts at a favorable price after market movements; and on the day of the address, he posted again, claiming to be at an airport watching the broadcast. Kalshi subsequently froze his account and reported the matter to regulators.
CFTC fined approximately $35,000 first; Kalshi escalated with a lifetime ban for "non-cooperation"
In July, the CFTC reached a settlement with Santos: he agreed to disgorge approximately $17,500 in profits and pay an additional $17,500 civil penalty, totaling around $35,000, and was barred from trading on CFTC-regulated prediction markets for three years. The regulator's settlement report noted Santos had cooperated with the investigation. However, Kalshi's August 31 sanctions were independent of that settlement and more severe. The company stated that Santos did not adequately cooperate with its internal investigation, leading to a lifetime ban rather than the time-limited suspensions seen in other cases. The prohibition covers his direct accounts and any indirect entry methods. The $71,356 fine was levied by the compliance department under exchange rules and constitutes a separate proceeding from the CFTC settlement.
On the same day, three other candidates received much lighter penalties: suspensions for cooperation
On the same day, Kalshi also handled several cases involving candidates betting on themselves, with notably lighter penalties than Santos's: Laurie Buckhout, a Republican congressional candidate from North Carolina, purchased less than $1,000 in contracts related to her own campaign and was fined $2,590 with a three-year suspension. She described it as "a stupid mistake" and proactively cooperated with corrections upon discovering the issue. Ben Meadow, a Republican gubernatorial primary loser in Maine, was fined $5,434 and suspended for three years. He stated his wager was for "novelty and entertainment" purposes and yielded no profit. Stephen Cloobeck, billionaire founder of Diamond Resorts, wagered approximately $10,000 on contracts related to the California gubernatorial Democratic primary he had already exited; he was fined about $31,700 and suspended for three years. A spokesperson noted that these four cases involving cooperation all resulted in temporary suspensions, with the lifetime ban reserved exclusively for Santos. In a separate case, Gabriel Perez, a White House teleprompter operator, faced a $65,000 civil penalty from the CFTC disclosed last Friday, along with disgorgement of over $107,000 in profits; Kalshi imposed a three-year suspension on him as well.
Background: Santos's prior record and regulatory pressure on the industry
Santos was expelled from the House in 2023 and pleaded guilty to wire fraud and identity theft in 2024, receiving a sentence of over seven years in prison, which was commuted last year by President Trump. This incident occurred approximately four months after the commutation. With regulatory pressure over insider trading in prediction markets escalating in Washington, Kalshi aims to demonstrate its self-policing capabilities to regulators through these disciplinary actions.