Former U.S. Rep. George Santos has been banned for life from the prediction market Kalshi after placing large trades on his own State of the Union attendance and making false statements to move prices, the company said. Santos profited nearly $18,000 from the scheme.
How the scheme worked
Kalshi, a federally regulated exchange for event contracts, said Santos used his position as a sitting congressman to trade on whether he would attend the president's State of the Union address. He placed unusually large bets on his own attendance, then made false public statements designed to shift the market's odds in his favor.
The company did not detail the exact false statements, but said Santos's actions violated its rules against market manipulation and self-dealing. The ban is permanent and applies to all Kalshi products, not just political contracts.
Why Kalshi acted
Kalshi's terms prohibit traders from using non-public information or attempting to distort prices. Santos's trades were flagged by the company's surveillance systems, which detected the pattern of large positions followed by public statements that moved the market.
In a statement, Kalshi said it "will not tolerate any attempt to manipulate our markets" and that the lifetime ban reflects the severity of the conduct. The company also said it has referred the matter to regulators, though it did not name which ones.
Santos's legal troubles
Santos, a New York Republican, was expelled from the House in December 2023 after a scathing ethics report found he had fabricated his resume and misused campaign funds. He has pleaded not guilty to federal charges of wire fraud, money laundering, and theft of public funds.
The Kalshi ban is separate from those criminal proceedings. It is unclear whether the trading activity will factor into his ongoing case.
What happens next
Kalshi said it has already closed Santos's account and is working to recover the nearly $18,000 in profits. The company did not say whether it will pursue civil penalties or whether the referral to regulators could lead to further action.
Santos has not publicly commented on the ban. His next court appearance in the federal case is scheduled for later this month.
