Julia Demaree Nikhinson/AP
Kalshi has banned former Republican congressman George Santos for life after the prediction market company found he misled the public about whether he would attend President Trump’s State of the Union address in order to make a profit on the platform.
Kalshi, which has the power to impose financial penalties as part of its federal license, fined Santos $71,356.
Santos responded on X: “Hey @Kalshi thanks for the lifetime ban from your gambling platform. Let’s see how much longer you guys are around for.”
NPR first reported in June that federal authorities were investigating Santos for trades tied to a Kalshi market on who would be in attendance at the State of the Union.
Days before the president’s remarks, Santos posted a video on X saying, “I’m going to be there for the State of Union in the gallery, guys,” only to later notify his followers that he was “watching SOTU from an airport tv.”
What he concealed from his social media audience was that he had already placed bets on Kalshi that he would not show up to the event. Kalshi said Santos made more than $17,000 in profit on the wagers. The Commodity Futures Trading Commission, which regulates prediction markets, ordered Santos to give back those profits as part of a settlement reached with the former congressman last month. The federal regulator also fined him $17,500.
Santos, 38, who has a long history of fabricating details about his life and career, was expelled from Congress, where he represented New York, in 2023. A year later, he pleaded guilty to federal wire fraud and identity theft. His seven-year prison term was cut short last year after President Trump commuted his sentence.
Santos, who did not return NPR’s requests for comment, made violent threats against this reporter after NPR first reported on his State of the Union bets. Before his State of the Union activity was known, Santos was a paid promoter of Polymarket, Kalshi’s main rival. The company cut ties with Santos after federal investigators launched the probe into his betting.
Congressional and gubernatorial candidates also suspended from Kalshi after betting on their own races
Kalshi announced several other disciplinary actions on Monday against political candidates who bet on their own campaigns.
Laurie Buckhout, a Republican Congressional candidate in North Carolina, was issued a fine and suspended from the site for three years after wagering on her own race. In a statement, Buckhout said: “I bet on myself. Literally. 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.”
The company also suspended for three years and fined billionaire Stephen Cloobeck, the founder of the timeshare company Diamond Resorts, saying he bet $10,000 on his now-abandoned bid for governor of California. A representative for Cloobeck did not return a request for comment.
And former Planet Fitness president Ben Midgley, who ran to be Maine’s Republican candidate for governor this year but was defeated, was found by Kalshi to have also placed money on his own candidacy. He also received a three-year suspension and was hit with a financial penalty. Midgley also did not respond to a request for comment.
Kalshi’s spate of crackdowns comes after regulators in Washington announced a settlement with President Trump’s former teleprompter operator, Gabriel Perez, for using advance notice of the president’s speeches to profit on so-called “mention markets” on Kalshi. As part of the deal, Perez was forced to give back more than $100,000 he made by placing lucrative bets on Trump’s famously unpredictable choice of words. Perez was fined an additional $65,000, a sum regulators said was arrived at after he fully cooperated with the investigation.
Since the Trump administration has few guardrails on the booming prediction market industry, the platforms are largely tasked with policing themselves.
Federal authorities have criminally charged some traders suspected of using insider information to profit on sites, but the cases have mostly started with referrals from Kalshi and its main competitor, Polymarket.
The Commodity Futures Trading Commission has sued several states that have tried to treat prediction market sites as a form of gambling, a type of legal offensive the agency has never before embarked on.
The debate about whether the prediction market industry should be regulated as gambling or a type of financial investment product is playing out in federal courts in a fight that pits the platforms and the Trump administration against state regulators.
Last week, the U.S. Court of Appeals for the 9th Circuit delivered Kalshi a blow by ruling that Nevada had a right to ban the site as an illegal gambling operation.
The decision created a split with a ruling earlier this year from the 3rd Circuit Court of Appeals in a similar dispute that sided with Kalshi. The Supreme Court will likely have the final say over the legal status of prediction markets.
Last month, 44 states signed a letter to the Trump administration arguing that prediction market operators prey on young people and those who have a propensity for gambling addiction.
“These for-profit prediction markets are a new form of casino used primarily for a few to manipulate others — the type of harms squarely within States’ historic police powers to regulate gambling,” the letter stated.
