Former New York Rep. George Santos banned from Kalshi gambling platform

Last week I wrote about former White House teleprompter technician Gabriel Perez getting busted by the Commodity Futures Trading Commission. He allegedly used his insider knowledge to place bets on what words or phrases President Trump would say during certain speeches, including his State of the Union address in February. Perez was given a hefty fine and banned from trading on the Kalshi prediction market for three years.

Around the same time, Kalshi also issued its first-ever lifetime ban against former Representative George Santos. According to the CFTC, Kalshi allowed users to place bets on a contract titled “Who will attend the State of the Union?” Because Santos had sole control over whether he would attend the event, Kalshi specifically prohibited him from wagering.

Despite the prohibition, between Feb. 12 and 25 of this year, Santos allegedly made a series of trades on whether he would attend the address. And according to Kalshi, he made multiple public statements in an effort to influence the price of the prediction market contract.

Kalshi found that Santos made these statements “with the intent to manipulate the price of the Yes or No contracts that he intended to purchase,” according to regulatory findings. The CFTC stated that after the posts were made, the contract prices moved in a direction favorable to Santos’ positions, allowing him to earn more than $17,500. “Ultimately, these statements did in fact manipulate the price of said contracts,” the agency concluded.

After the CFTC’s investigation, Santos reached an agreement with the commission in July to return his winnings and pay a $17,500 fine. He also received a three-year trading ban. Kalshi, however, upped the stakes by imposing the lifetime ban and levying a $71,356 fine against him. A Kalshi spokesperson said the penalties were assessed against Santos due to “his lack of cooperation” with its compliance department, which established “reasonable cause” to believe he had engaged in insider trading over his attendance at the address.

Kalshi has a compliance team in place “to catch bad actors, punish them, and deter other people from doing it again,” Robert DeNault, the company’s head of enforcement and legal counsel, told CBS News. “Prediction markets might be relatively new for people ... but this type of behavior is not new,” he said, noting that Santos “has been subject to punishment by the CFTC, and now he’s being subject to punishment by our exchange.”

“Hey @Kalshi thanks for the lifetime ban from your gambling platform,” Santos wrote on X in response to the decision. “Let’s see how much longer you guys are around for.” No stranger to controversy, Santos represented New York’s 3rd District in the House of Representatives before being expelled in 2023 after being charged with campaign finance violations, fraudulently collecting unemployment benefits and lying to Congress about his wealth.

Santos admitted to deceiving donors and stealing the identities of 11 people – including his own family members – to make donations to his campaign. He was just the sixth member in the chamber’s history to be ousted by colleagues after 105 Republicans joining with Democrats to vote him out. Santos was sentenced to seven years in the Federal Correctional Institution in Fairton, New Jersey, after pleading guilty to fraud and identity theft in 2024 but was released by President Trump after serving just 84 days.

And here I always assumed the Super Bowl garnered the most wagering activity in February. Who would have known it was the State of the Union address?

Reg Wydeven is a partner with the Appleton-based law firm of McCarty Law LLP. He can be reached at [email protected].