George Santos becomes first person to get lifetime ban from Kalshi
By Marshall Cohen, Patrick Svitek, CNN
(CNN) — The prediction market Kalshi on Monday fined the Republican nominee in a competitive House race and imposed its first-ever lifetime ban, against former Rep. George Santos, after insider trading investigations.
The North Carolina candidate, Laurie Buckhout, admitted in a statement to CNN that she bet on her own campaign and said she made a “dumb mistake.”
This is the highest-profile example to date of political insider trading, where candidates or staffers trade on markets where they possess inside information or can influence the outcome. Experts have warned the practice is a growing danger as prediction platforms have exploded in popularity this year.
“I bet on myself. Literally,” Buckhout said. “It was a dumb mistake, and as soon as I learned there was an issue, I worked to make it right. Safe to say my career as a Kalshi trader was short-lived.”
Kalshi noted in a legal filing on Monday that she traded less than $1,000, cooperated with their internal investigation, and will get a three-year suspension.
The lifetime ban against Santos, meanwhile, stems from insider bets he placed about his potential appearance at the State of the Union earlier this year. Santos infamously was expelled from Congress in 2023 and went to prison in an unrelated fraud case but was released early thanks to a Trump commutation last year.
Prediction markets like Kalshi and Polymarket – where people can wager on sports, elections, entertainment and more – now see billions of dollars in weekly trading volume. The companies and federal regulators have pledged to crack down on insider trading and market manipulation.
Earlier this year, Kalshi suspended three minor political candidates, hailing from both parties, for similar conduct.
CNN has a partnership with Kalshi and uses its data to cover major events. CNN’s editorial employees aren’t permitted to trade on prediction markets.
Competitive House race
The Buckhout case is the first publicly known instance of a nominee running for Congress caught betting on their own campaign. And it came in a critical district.
President Donald Trump has endorsed Buckhout, a retired Army colonel, and she was one of the first candidates named to the National Republican Congressional Committee’s “MAGA Majority” program for the midterms. The program promotes the party’s most promising recruits to flip Democratic-held seats.
North Carolina’s 1st Congressional District is one of the most competitive House districts in the midterms. It covers a mostly rural region of eastern North Carolina and has been represented by Democratic Rep. Don Davis since 2023.
Republican state lawmakers redrew the district last year as part of Trump’s nationwide push for GOP-friendly redistricting ahead of the midterms. It is now classified as “Lean Republican” by the Cook Political Report, making it one of Republicans’ best shots at netting a seat.
Buckhout ran against Davis in 2024 and lost by fewer than 2 percentage points before the district was redrawn. She briefly worked for the Department of Defense last year before launching her latest campaign.
Democrats seized on the Kalshi announcement to attack Buckhout.
“If Buckhout can’t be trusted to follow the most basic prediction market rules, there is no chance she can be trusted as an ethical representative for North Carolina families,” Madison Andrus, a spokeswoman for the Democratic Congressional Campaign Committee, said in a statement.
Lifetime ban for Santos
The Santos case is the first lifetime ban on the Kalshi platform, a spokesperson confirmed.
“Hey @Kalshi thanks for the lifetime ban from your gambling platform. Let’s see how much longer you guys are around for,” Santos posted Monday on X, referring to the ongoing legal battle over whether prediction companies like Kalshi should be regulated by the states as gambling or continue to be regulated by the federal government as financial markets.
Federal regulators that oversee prediction markets also investigated Santos for his conduct. The Commodity Futures Trading Commission announced a settlement in July, imposing a $17,500 fine against Santos and closing the government’s probe.
Kalshi’s head of enforcement, Bobby DeNault, said Monday that the company was taking action against Buckhout, Santos, and a few other traders who broke the site’s rules.
“All but one individual (George Santos) cooperated with our Compliance Department inquiries and will be banned temporarily,” DeNault said.
CNN has reached out to Santos for comment.
He previously denied wrongdoing and called the allegations “preposterous.” After public reports about his questionable trades, he attacked Kalshi on social media, calling it “a predatory app.”
The-CNN-Wire
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