Former U.S. Congressman George Santos received Kalshi’s first lifetime ban alongside a $71,536 fine for illegal trading in its prediction markets.
Santos was accused of manipulating trading markets around the time of the State of the Union address earlier in the summer. A Kalshi spokesperson said that Santos, who it was previously reported had entered settlement talks, was given a large fine due to his “lack of cooperation.”
Kalshi bans and fines George Santos
An official notice released by Kalshi outlined that the permanent suspension and fine had gone into effect last Friday.
NPR first reported earlier in early June that Santos had allegedly used public statements to convince traders that he would attend the State of the Union, only to purchase contracts that would pay shareholders if he didn’t show up.
Santos kept the facade running up until the day before the event, when he said that he would be in the gallery at the event. He posted a follow-up shortly after the State of the Union began, claiming that he was caught in the airport and hadn’t made it to Washington D.C.
“The Compliance Department found that Santos made these statements with the intent to manipulate the price of the Yes or No contracts that he intended to purchase,” Kalshi wrote. “Ultimately, these statements did in fact manipulate the price of said contracts.”
Kalshi also confirmed the penalty was due to his lack of participation in an investigation, leading to the $71,536 fine — almost exactly four times the $17,839.57 that Kalshi claimed Santos profited from his contracts.
Santos manipulated the public
Santos, never one to shy away from controversy, responded to Kalshi’s punishment announcement on X (Twitter) on Monday.
“Hey Kalshi thanks for the lifetime ban from your gambling platform,” Santos wrote on X (Twitter), highlighting the company’s ongoing feuds over its claims that it should not be state-regulated like other gambling operators. “Let’s see how much longer you guys are around for.”
Kalshi’s State of the Union market history shows that Santos only had a 14% chance of attending the event two days before its scheduled date. The market shot as high as 76% just hours before it commenced, which allowed Santos to receive larger payouts for his contracts.
Santos had previously agreed to pay the Commodity Futures Trading Commission (CFTC) $35,000 in a settlement agreement. He also received a three-year trading ban and lost his sponsorship as an affiliate of Polymarket, a top competitor of Kalshi in prediction markets.
While speaking on his podcast in March, Santos stayed an arm’s length away from taking responsibility or claiming any wrongdoing in the ordeal.
“I guess people lost money,” he said. “Some people made unexpected money. That's to show you how fragile these markets are.”
Santos and more scandals
Santos has a checkered past. After being sworn into the U.S. House of Representatives in 2023, he was charged with fraud and campaign finance violations and later sentenced to about seven years in prison for fraud and aggravated identity theft. He served 84 days before he was commuted by President Trump.
However, Santos wasn’t the only politician to be reprimanded by Kalshi. Candidates for Governor in California and Maine and a congressional candidate in North Carolina all received three-year bans and fines after they cooperated with investigations into illegal trading.
The Trade Handle Prediction Markets Take
Although Santos was never criminally convicted, the momentum had been against him since reports were first revealed. Kalshi’s confirmation adds another scandal to a growing list of incidents just two days after President Trump’s former teleprompter operator, Gabriel Perez, was ordered to pay $172,000 for using inside information to profit at Kalshi. However, it also shows the increasing authority of Kalshi, which has now crossed the Rubicon by using its power to implement a permanent ban.