Prediction platform Kalshi has handed former U.S. congressman George Santos its first-ever lifetime ban and fined him $71,356 over allegations of insider trading.
According to a disciplinary filing released by the firm, its compliance team determined there was reasonable cause to conclude that the former lawmaker participated in unlawful trades.
The decision comes amid a surge in questionable transactions across prediction markets like Kalshi and Polymarket, creating fresh oversight hurdles as law enforcement and regulators step up their focus on the expanding industry.
In June, Kalshi referred Santos to the U.S. Department of Justice following the discovery of unusual account activity.
Fresh out of prison for wire fraud and identity theft, Santos allegedly began a new scheme by fixing the odds on a bet of whether he would attend President Donald Trump’s State of the Union address in February, unnamed sources told NPR at the time.
He posted on X a day before Trump’s speech saying that he would be at the U.S. Capitol for it. But the next day, he said he would instead be watching the speech from an airport TV, writing on X that it was “not part of the plan!”
Before his announcement, Santos had allegedly placed bets on Kalshi that he was not going to attend the State of the Union, NPR reported.
Several social media users immediately accused him of running another scheme.
Santos agreed to a $35,000 settlement with federal investigators to resolve the DOJ inquiry. In a statement at the time, Santos’ lawyer said his client had a “genuine intention” to attend the State of the Union and had booked a hotel and plane ticket before a winter storm ruined the plans.
“Mr. Santos concealed neither his intention to attend, nor his change of plans to not attend the SOTU, from anyone," attorney Joseph Murray said. “There was absolutely no intent to deceive any person, nor intent to manipulate any market."
Santos addressed complaints about the SOTU bets on his podcast in March, saying, “I guess people lost money. Some people made unexpected money. That’s to show you how fragile these markets are.”
On Monday, Santos wrote in an X post, “Hey @Kalshi thanks for the lifetime ban from your gambling platform. Let’s see how much longer you guys are around for,” alongside a kiss emoji. He then called Kalshi “an unserious company” and labeled the ban “frivolous nonsense.”
Santos was ousted from Congress following charges of identity theft and fraud. He pleaded guilty to fraud and identity theft in 2024 and a federal judge in New York sentenced him to 87 months in prison. The judge said the former congressman showed no remorse for campaign donors and voters he lied to and swindled out of money.
U.S. President Donald Trump commuted his prison sentence in October, after the 37-year-old former Republican congressman served just 84 days.
“George Santos was somewhat of a ‘rogue,’ but there are many rogues throughout our Country that aren’t forced to serve seven years in prison,” Trump wrote on Truth Social.
He went on to praise Santos for having “the Courage, Conviction, and Intelligence to ALWAYS VOTE REPUBLICAN!”
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