Prediction market platform Kalshi has imposed lifetime bans and financial penalties on Laurie Buckhout, a US House candidate, and George Santos, a former congressman, over alleged insider trading on its platform. Buckhout, running for North Carolina’s 1st district, faces a three-year trading suspension and a $2,590 fine, while Santos, expelled from Congress in December 2023, was permanently barred and fined $71,356. The penalties followed an investigation into trades linked to their political influence, including Santos’s betting on his attendance at the State of the Union address in February 2026.
Kalshi’s disciplinary action stems from its rules prohibiting traders who hold decision-making power from influencing market outcomes. The platform cited manipulation of event contracts tied to Buckhout’s congressional race and Santos’s public appearances. Don Davis, the Democratic incumbent in North Carolina’s 1st district, remains listed on Kalshi’s markets with a 63% chance of winning, according to event contracts.
The case adds to growing regulatory scrutiny of prediction markets. The Commodity Futures Trading Commission (CFTC) recently invoked emergency authority to block New York’s attempt to restrict Kalshi’s operations, asserting federal jurisdiction over such platforms. Meanwhile, Polymarket faces separate lawsuits from state gaming authorities over alleged illegal bets on sporting events.
George Santos, via a social media post, described Kalshi as an “unserious company,” though it remains unclear whether he cooperated with the investigation. Laurie Buckhout reportedly called her actions a “dumb mistake.” The outcomes of ongoing legal disputes between Kalshi, Polymarket, and regulators could shape the future of prediction market regulation in the US.
Written by Oliver Grant
Markets Desk
