Kalshi bans George Santos and Laurie Buckhout for insider trading on prediction markets

Prediction market platform Kalshi announced action against US House of Representatives candidate Laurie Buckhout and ousted Republican lawmaker George Santos over using insider information for trading on event contracts, in one of the first lifetime bans the company has imposed since its launch in 2021.

In separate notices of settlement of disciplinary action announced on Friday, Kalshi’s compliance department said it had permanently suspended Santos from trading on the prediction markets platform and imposed a $71,356 penalty. Buckhout received a three-year suspension and a $2,590 penalty.

Both restrictions by Kalshi were made in response to investigations into Santos and Buckhout trading using event contracts that could be manipulated by their own actions. According to the platform, Buckhout, running in North Carolina’s 1st congressional district, “announced her candidacy for public office and was added as a market option for a contract on a North Carolina Congressional election,” while Santos “engaged in trading activity in certain markets related to his attendance at the State of the Union address” in February 2026.

“If a Trader is a decision maker, either directly or indirectly, or has any influence, directly or indirectly, no matter the scale and importance of the influence, on the outcome of the Underlying event of any Contract, that Trader is prohibited from attempting to enter into any trade, either directly or indirectly, on the market in such Contracts,” state Kalshi’s rules.

The actions by the company represented a significant crackdown at a time when prediction market platforms are under scrutiny by state and federal lawmakers over claims that many of the event contracts are susceptible to manipulation. President Donald Trump’s teleprompter operator, Gabriel Perez, was fined $172,000 by federal regulators after trading event contracts on Kalshi related to Trump’s speeches.

While Kalshi’s compliance department reported that Buckhout “cooperated with the inquiry” and agreed to the three-year trading ban and penalty, the platform made no such statement in Santos’ case suggesting that the former US lawmaker had cooperated with its investigation.

Related: Trump teleprompter operator made $100K betting on Kalshi markets tied to speeches: ABC

Buckhout remains the Republican candidate for North Carolina’s 1st congressional district in the 2026 midterm elections, while Santos, formerly a representative for New York’s 3rd congressional district, was expelled from Congress in December 2023 amid fraud allegations.

In response to the settlement, Santos said in a Sunday X post that Kalshi was an “unserious company.” Buckhout reportedly called her actions betting on her own congressional race a “dumb mistake.”

As of Tuesday, Kalshi still listed event contracts related to the outcome of Buckhout’s North Carolina race, giving Democratic incumbent Don Davis a 63% chance over the Republican’s 41%.

Event contract for Laurie Buckhout in North Carolina House race. Source: Kalshi

CFTC taps emergency authority in fed-state prediction markets legal battle

Kalshi and other prediction market platforms like Polymarket face several lawsuits filed by individual US state gaming authorities over allegations the companies are facilitating illegal bets on sporting events. At the same time, the sole commissioner and chair of the US Commodity Futures Trading Commission (CFTC), Michael Selig, claims that the agency has “exclusive jurisdiction” over prediction markets and vowed to take legal action against any state authority challenging this position.

Last month, the CFTC, in a rare move, invoked emergency authority opposing the state of New York attempting to bar Kalshi from offering contracts tied to sports, elections and other events.