Kalshi permanently bans George Santos over State of the Union speech bets

Santos, who was expelled from the ​House of Representatives in 2023, was also fined by the US Commodity Futures Trading Commission a month ago for alleged market manipulation over the incident.

Prediction market company Kalshi said on Monday it imposed a penalty of more than $71,000 on former US Congressman George Santos and permanently banned him from its platform for betting on his own attendance at US President Donald Trump's State of the Union address.

Santos, who was expelled from the ​House of Representatives in 2023, was also fined by the US Commodity Futures Trading Commission a month ago for alleged market manipulation over the incident.

Kalshi also said on Monday it was imposing penalties and temporary suspensions on three current and former candidates for political office in Maine, California, and North Carolina who had allegedly bet on their own races.

US regulators previously fined former White House teleprompter operator Gabriel Perez for allegedly wagering on information about Trump's speeches. Attempts to reach Perez on Monday were unsuccessful.

According to Kalshi and the CFTC, Santos made false statements on social media that benefited his wagers and ​then did not attend the address, earning him nearly $18,000.

Santos 'never intended to manipulate any market'

Joe Murray, a lawyer for Santos, did not immediately respond to a request for comment. In July, Murray said Santos denied the CFTC's allegations and settled them only to avoid drawn-out litigation, asserting that Santos never intended to deceive anyone or manipulate any market.

Trump commuted Santos' seven-year prison sentence for fraud and identity theft last year following his guilty plea for inflating fundraising figures and falsifying donor names to secure Republican Party financial support during the 2022 election cycle.

Laurie Buckhout, the current Republican nominee for North Carolina's 1st congressional district, said in an email that wagering on herself had been "a dumb mistake" that she had quickly worked to correct upon learning that it was improper.

Kalshi imposed a fine of about $2,600 and three-year suspension on Buckhout.

Efforts to contact Stephen Cloobeck and Ben Midgley, former candidates for governor in California and Maine, respectively, who were also penalized by Kalshi, were unsuccessful.

The boom in election betting is likely ​to test ⁠the ability of prediction markets such as Kalshi to police insider trading, according to experts and data shared with Reuters. Kalshi and rival Polymarket have said that they are equipped to identify and block suspicious activity and protect market integrity.