Kalshi Permanently Bans Former US Rep. George Santos in First for Platform

Kalshi has permanently barred former US Representative George Santos from trading on its prediction-market platform, marking the first lifetime ban the company has imposed on a user.

The Block reported on August 31 that, according to a disciplinary settlement notice filed by Kalshi, Santos violated platform rules while trading contracts tied to whether he would attend the State of the Union address. Kalshi also fined him more than $71,000.

Kalshi’s compliance department said it had reasonable grounds to conclude that Santos traded in a market related to his own attendance at the State of the Union.

Santos settled the same matter with the Commodity Futures Trading Commission last month. The agency found that he publicly commented about whether he would attend the State of the Union about two weeks before the speech, materially affecting prices in the related prediction contracts.

Under that settlement, Santos agreed to pay $35,000 to the CFTC. He neither admitted nor denied the agency’s findings. His lawyer said Santos cooperated with the investigation and that the State of the Union contract was the first prediction-market product he had traded.

Santos represented a New York district in the US House starting in January 2023, but was expelled later that year after a House Ethics Committee investigation into misconduct.

The action comes as concerns mount over trading on nonpublic information in prediction markets. In April, the US Justice Department arrested an active-duty Army soldier accused of betting on Polymarket with confidential information ahead of the arrest of former Venezuelan President Nicolas Maduro.

The CFTC also ordered Gabriel Perez, who had worked as a teleprompter operator at the White House, to pay more than $172,000 in a settlement on August 28. Perez was accused of profiting in Kalshi’s so-called mention markets by using advance knowledge of President Donald Trump’s speeches.

In Congress, bipartisan bills have been introduced to restrict prediction-market trading by people with access to nonpublic information, but none has become law. Major platforms including Kalshi and Polymarket are also tightening internal controls to curb insider trading, including verifying the employment information of traders participating in sensitive markets.