Kalshi permanently bans George Santos over State of the Union bets

Prediction market company Kalshi said on ​Monday it imposed a penalty of more ‌than $71,000 on ​former U.S. Congressman George Santos and permanently banned him from its platform for betting on his own attendance at 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 U.S. 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.

U.S. 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.

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 on 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.