Kalshi Permanently Bans Former Rep. Santos for First Time Over SOTU Trading

Prediction market platform Kalshi has permanently banned former U.S. Representative George Santos, marking the platform's first-ever permanent ban on an individual. According to a disciplinary settlement notice filed Monday, Santos violated platform rules by trading on prediction contracts regarding whether he would attend the State of the Union (SOTU) address and was fined over $71,000. This follows a prior settlement with the U.S. Commodity Futures Trading Commission (CFTC), which accused Santos of using his public statements two weeks before the SOTU to influence prices on related event contracts, resolving the matter for $35,000. Santos's lawyer stated he had booked hotel and flight reservations to Washington, expecting to attend the event. Santos served as a New York representative from January to late 2023 before being expelled over ethical violations. As the prediction market grows to a multi-billion-dollar scale, insider trading concerns are increasingly drawing attention. The CFTC recently fined former White House teleprompter operator Gabriel Perez $172,000 for profiting from early access to Trump's speech content in Kalshi's "mention market." Lawmakers have proposed several bipartisan bills to restrict trading on non-public information, though none have passed; platforms like Kalshi and Polymarket have implemented measures such as mandatory employment verification for traders in sensitive markets to mitigate risks.