Over the past several months, prediction markets such as Kalshi and Polymarket have surged in popularity, allowing users to “trade” positions based on a variety of predictions, extending beyond sports to major events taking place around the world. As these platforms face increasing scrutiny, Kalshi has now taken action against former Republican Representative George Santos.
On Monday, Kalshi officially announced that Santos had been permanently banned following allegations of insider trading, in what represents an unprecedented move for the company and prediction markets more broadly.
Who is George Santos?
George Santos has become infamous in pop culture due to a high-profile controversy a few years ago.
Santos was elected to Congress from Long Island in November 2022, becoming the first openly LGBTQ Republican freshman in the House. His political career quickly came under intense scrutiny, however, after news organizations revealed fabricated claims about his education and employment at Goldman Sachs, Citigroup, and Chase, along with invented stories about his family and alleged connections to 9/11.
Financial fraud was at the heart of the controversy. Santos claimed that he had loaned more than $700,000 to his campaign in 2022, despite reporting a net worth of only $55,000 in 2020. He also improperly used donor credit card information and spent campaign money on Botox, luxury purchases, and dating apps rather than political activities. The House Ethics Committee later uncovered significant evidence of fraudulent behavior and false campaign filings.
Santos pleaded guilty to wire fraud and aggravated identity theft in August 2024 and faced a potential prison sentence of 6-8 years. He had previously been expelled from Congress in December 2023. Trump commuted his sentence in 2025, and Santos was subsequently released after serving a short prison term.
Santos Banned From Kalshi
Following his high-profile fraud case and his subsequent pardon from Trump, Santos faced another scandal earlier this year when he was accused of insider trading on Kalshi related to his appearance at Trump’s State of the Union address.
The former Representative placed bets on Kalshi in February concerning whether he would attend the speech. Before the event took place, Santos posted on social media that he intended to attend, causing the market to shift. He ultimately decided not to appear at the address.
Last month, Santos was hit with a $35,000 fine from the Commodity Futures Trading Commission, the federal regulator responsible for overseeing prediction markets, over similar allegations. Kalshi has now decided to take action against Santos itself.
On Monday, Kalshi officially announced that Santos had been “permanently” banned from the platform after the company found evidence that he had engaged in insider trading. In addition to the ban, Kalshi fined him $71,356.
“The Kalshi compliance department has established reasonable cause to believe that George Santos engaged in trading activity in certain markets related to his attendance at the State of the Union address,” the company said in a statement via the New York Times.
The move marks the first ban of its kind for Kalshi. Kalshi also said that Santos failed to cooperate with its investigation.
Santos Breaks His Silence
Following the announcement that he had been banned from the platform, Santos took to social media to react to the news.
“Hey @Kalshi thanks for the lifetime ban from your gambling platform. Let’s see how much longer you guys are around for,” he said in a post on X, adding a kissing emoji.
Santos went on to criticize the company for apparently violating its own deadlines.
“By the way Kalshi is such an unserious company it violates its own notices and deadlines lol,” Santos said in a follow-up post. “On August 7th they gave us a 30 day notice and today they leaked/ announced once again their frivolous nonsense. Leaking and attention seeking seem to be the M/O of this organization. Pathetic!”
The New York Times said that Santos declined to comment for the article.
About Kevin Harrish