George Santos, the former US Republican congressman who was expelled from the House of Representatives in 2023 and later convicted of fraud and identity theft, has been permanently banned from the online prediction market platform Kalshi after the company concluded he likely engaged in insider trading. Kalshi announced the lifetime ban on Monday, effective from the previous Friday, along with a financial penalty of $71,356. The case centres on a series of bets Santos placed between 2 and 25 February on whether he would attend President Donald Trump's State of the Union address — an event whose outcome he could directly influence.
According to Kalshi's compliance department, Santos placed sizeable wagers betting against his own attendance while simultaneously making public statements about his plans that were, in some cases, false or misleading. Those statements moved contract prices on the platform. On the eve of Trump's speech, Kalshi had placed the odds of Santos attending at close to 75%. Then, minutes into the address, Santos posted on social media that he had been delayed at an airport. His trades ultimately netted him a profit of $17,839. When he addressed the controversy on his podcast in March, Santos dismissed concerns, saying: "I guess people lost money. Some people made unexpected money. That's to show you how fragile these markets are."
The disciplinary action by Kalshi follows a broader regulatory response to the episode. In July, Santos agreed to pay $35,000 to settle a separate federal investigation by the Commodity Futures Trading Commission (CFTC), a US markets regulator, into the same trades. His lawyer said at the time that Santos denied wrongdoing and had settled only to avoid prolonged litigation. Santos himself responded to the Kalshi ban on social media by thanking the platform sarcastically and adding: "Let's see how much longer you guys are around for." Kalshi said it had referred his case to federal authorities earlier this summer after internal systems flagged suspicious behaviour.
Santos's political career was defined by controversy from the start. He won a seat representing a New York district in 2022 after fabricating large parts of his biography, including false claims of a Wall Street career and Jewish heritage. He was the sixth member in US history to be expelled from Congress. After pleading guilty to wire fraud and aggravated identity theft — including stealing the identities of nearly a dozen people — he was sentenced to seven years in prison in 2024 but served only 84 days before Trump commuted his sentence.
The Santos case arrives at a significant moment for prediction markets, a rapidly growing industry that allows users to wager on the outcomes of events ranging from elections to economic indicators. Kalshi also announced penalties against three other current and former political candidates in Maine, California, and North Carolina for betting on their own electoral races. The industry's expansion is drawing increased regulatory scrutiny, with authorities signalling that platforms will be held to higher compliance standards, particularly when those with insider knowledge are able to trade on political or governmental events.