Prediction market platform Kalshi has imposed its first-ever lifetime ban on former Congressman George Santos after finding he placed insider bets about his potential appearance at the State of the Union earlier this year. As reported by CNN, this marks the highest-profile example to date of political insider trading, where candidates or staffers trade on markets where they possess inside information or can influence the outcome. Santos, who was expelled from Congress in 2023 and went to prison in an unrelated fraud case before being released early thanks to a Trump commutation last year, previously denied wrongdoing and called the allegations "preposterous." The lifetime ban stems from Santos's conduct that violated Kalshi's rules against trading on insider information. Kalshi's head of enforcement, Bobby DeNault, confirmed that "all but one individual (George Santos) cooperated with our Compliance Department inquiries and will be banned temporarily." According to Kalshi's regulatory filings, the platform found that Santos "made these statements with the intent to manipulate the price of the Yes or No contracts that he intended to purchase. Ultimately, these statements did in fact manipulate the price of said contracts." The Commodity Futures Trading Commission previously leveled its own penalties against Santos, including a disgorgement of his winnings and a $17,500 fine.
Prediction market platform Kalshi has suspended Republican House candidate Laurie Buckhout for three years and fined her $2,589.96 after finding she had placed bets on her own race. According to reports from CNN, Buckhout is challenging Democratic Representative Don Davis in North Carolina's 1st Congressional District. The disciplinary action was taken under Kalshi's rule 5.17(z), which bars any trader with direct or indirect influence over an event from trading that contract. As reported by WRAL, Buckhout wagered less than $1,000 on her own candidacy, with Kalshi not providing an exact dollar figure in their statement. Buckhout admitted in a statement to CNN that she "bet on myself. Literally." She stated "It was a dumb mistake, and as soon as I learned there was an issue, I worked to make it right. Safe to say my career as a Kalshi trader was short-lived." The other penalties announced Monday were levied against political candidates Ben Midgley, who ran as a Republican candidate for governor in Maine; Stephen Cloobeck, who briefly ran as a Republican for California governor; and Buckhout. Each purchased "event contracts" related to their own races, in violation of Kalshi's insider trading rules, with all three "qualifying as a decision maker for the contract and having direct influence on the outcome of the Underlying event."
The enforcement action is part of a national investigation that found multiple politicians were betting on races they were involved in, violating Kalshi's rules against trading on insider information. As reported by WRAL, former Congressman George Santos from New York was banned for life with a penalty of more than $70,000 after refusing to cooperate with investigators. Buckhout's three-year ban and fine were considerably smaller than Santos's penalty, demonstrating varying levels of cooperation with the inquiry. The enforcement takes place in North Carolina's 1st Congressional District, a swing district that Republicans see as a pick-up opportunity. In their previous matchup, Davis won the 1st district in 2024 with 49.5% of the vote to Buckhout's 47.8%, but Republican state lawmakers later redrew the district to be more favorable to Republicans, starting this year. Their 2026 rematch is being closely watched nationally as one of the most competitive House races in the country. Cloobeck, a billionaire real estate developer, "purchased approximately $10,000 worth of contracts related to his own candidacy," according to Kalshi's regulatory filings. Under the terms of the settlement, Kalshi suspended Cloobeck from direct or indirect access to Kalshi for a period of three years and imposed a financial penalty of $31,770.
Democratic Congressional Campaign Committee criticized the incident, with spokeswoman Madison Andrus stating that "there is no chance she can be trusted as an ethical representative for North Carolina families." Democratic Representative Don Davis called the revelation about Buckhout's trading activities a "disqualifying breach of public trust." As reported by CNN, Davis said Buckhout's actions were "a disqualifying breach of public trust" and chided her for using the campaign as "an opportunity to cash in." As of Monday, Kalshi bettors predict Davis will win reelection despite the map having been re-drawn to favor a Republican. Buckhout was favored as recently as July 26, according to Kalshi records, but Davis is currently seen as having a more than 60% chance of winning. The Buckhout case is the first publicly known instance of a nominee running for Congress caught betting on their own campaign. Earlier this year, ABC News reported that Kalshi had penalized three other political candidates who had wagered on their own races.
A Kalshi executive told WRAL that the company puts a strong focus on rooting out insider trades to increase public confidence in the platform. Sara Lang, the company's head of corporate development, stated in an interview that "we have robust protection, security, surveillance in place to make sure that it isn't happening." She noted that while there are always going to be some bad actors that slip through the cracks, the company is monitoring 24/7 consistently to make sure that if people have inside information, they are not on their platform. This disciplinary action follows Kalshi's recent enforcement efforts against other high-profile cases, including the CFTC and Kalshi acting against a White House teleprompter operator over bets on Trump's speech text. Kalshi has also suspended three minor political candidates earlier this year for similar conduct, demonstrating the platform's commitment to preventing insider trading. Prediction markets like Kalshi and Polymarket now see billions of dollars in weekly trading volume, with companies and federal regulators pledging to crack down on insider trading and market manipulation.
