Prediction market operator Kalshi has permanently banned former U.S. Rep. George Santos from its platform and imposed a $71,356 penalty over trading tied to his attendance at President Donald Trump’s 2026 State of the Union address.
The decision marks Kalshi’s first permanent ban and adds another layer to a case that has drawn scrutiny from U.S. regulators. Kalshi’s compliance department said it found reasonable cause to believe Santos engaged in illicit trading and cited his lack of cooperation with the company’s investigation.
How the State of the Union Bet Unfolded
Santos traded contracts tied to whether he would attend the February 24 address. Federal regulators later said he earned more than $17,000 from the trades after making public statements about his plans that affected market prices.
The Commodity Futures Trading Commission previously settled the case with Santos in July. Under that agreement, he surrendered his trading profits, paid a $17,500 civil penalty and accepted a three-year ban from prediction-market trading.
Santos has denied intentionally manipulating the market. His attorney said the settlement was designed to resolve the dispute without prolonged litigation and did not represent an admission of wrongdoing.
The controversy intensified after Santos publicly indicated that he planned to attend the State of the Union. He later said travel problems prevented him from reaching Washington. The change in circumstances triggered scrutiny because his trading positions were tied directly to his own attendance.
Prediction Markets Face Greater Scrutiny
The Santos case comes as prediction markets face growing attention over insider trading and market manipulation. Kalshi has increasingly emphasized its surveillance and compliance systems as trading volumes expand.
The platform previously referred Santos’s activity to federal authorities. Regulators have since taken a broader interest in whether people with privileged information can profit from event-based contracts.
For Kalshi, the lifetime ban signals a tougher approach toward participants who violate its rules. For Santos, it adds a platform-level restriction to the separate three-year federal trading ban already imposed by regulators.
