Prediction market operator Kalshi has imposed its first-ever lifetime ban after concluding that former U.S. Representative George Santos violated exchange rules while trading contracts connected to his attendance at President Donald Trump’s State of the Union address.

The company announced that Santos has been permanently prohibited from accessing its platform, either directly or indirectly, and ordered to pay a $71,356 penalty. Kalshi said its investigation found that Santos made public statements regarding his attendance plans while simultaneously trading contracts linked to that outcome.

According to the company, the former New York congressman earned $17,839.57 through the trades. Kalshi said the larger financial penalty reflected additional sanctions related to Santos’ conduct during the investigation.

“The Compliance Department found that Santos made these statements with the intent to manipulate the price of the Yes or No contracts that he intended to purchase. Ultimately, these statements did in fact manipulate the price of said contracts,” the company stated according to NBC News.

Kalshi spokesperson Elisabeth Diana said the action marks the first permanent ban in the platform’s history. Other recent disciplinary cases announced by the company resulted in temporary suspensions rather than lifetime exclusions because those individuals cooperated with investigators.

State of the Union Contracts Trigger Investigation

The case centered on contracts allowing traders to speculate on whether Santos would attend President Trump’s State of the Union address. In February, Santos publicly indicated that he planned to be present at the event.

In a video posted on social media, Santos told followers: “I’m gonna be in the gallery.”

His public comments contributed to market expectations that he would attend. According to Kalshi’s historical market data, the probability assigned to Santos attending increased significantly after his statements. On the eve of the speech, the market reportedly placed his attendance odds at nearly 75%.

However, Santos ultimately did not appear at the event.

Minutes after the speech began, he posted on X that airport-related issues had prevented him from attending. The unexpected absence immediately drew attention from market participants and social media users who questioned whether he had benefited from contracts tied to the outcome.

Kalshi later concluded that Santos had placed multiple wagers between February 2 and February 25 on whether he would attend and that his public remarks influenced contract pricing.

The company determined that Santos was in a position to affect the outcome of the event and therefore should not have traded contracts connected to his own attendance plans.

Previous Federal Investigation and Settlement

The Kalshi enforcement action follows an earlier investigation by the U.S. Commodity Futures Trading Commission (CFTC).

In July, Santos agreed to pay $35,000 to settle allegations related to the same trading activity. The CFTC concluded that he had made misleading statements and omitted material information while posting publicly about his attendance plans and simultaneously placing wagers on the outcome.

At the time, Santos’ attorney, Joseph Murray, said the settlement was intended to resolve the matter without extended litigation.

“He chose a prompt, practical resolution, rather than protracted, costly litigation, and that choice should not be mistaken for admission of any wrongdoing, because it is not one,” Murray said.

Kalshi’s competitor, Polymarket, also severed ties with Santos following the federal investigation. Santos had worked as a paid affiliate for the platform beginning in February.

Santos has continued to deny wrongdoing. Responding to Kalshi’s latest action, he criticized the company on social media, describing it as “an unserious company” and characterizing the disciplinary action as “frivolous nonsense.”

In another post, he wrote: “thanks for the lifetime ban from your gambling platform. Let’s see how much longer you guys are around for.”

Earlier this year, Santos addressed criticism surrounding the State of the Union trades during an episode of his podcast. “I guess people lost money,” Santos said in March. “Some people made unexpected money. That’s to show you how fragile these markets are.”

Additional Political Figures Face Sanctions

Kalshi also disclosed disciplinary settlements involving several political candidates who traded on markets related to their own campaigns.

Among them was North Carolina congressional candidate Laurie Buckhout, a Republican and retired Army colonel running against Democratic Representative Don Davis. Kalshi imposed a $2,589 fine and a three-year trading ban after determining that Buckhout had wagered on her own election prospects.

Buckhout acknowledged the activity and cooperated with the investigation. “I bet on myself. Literally. It was a dumb mistake, and as soon as I learned there was an issue, I worked to make it right,” she said. “Safe to say my career as a Kalshi trader was short-lived.”

The company also announced three-year bans for former gubernatorial candidates in California and Maine. Kalshi stated that those individuals cooperated with investigators, which influenced the disciplinary outcomes. Earlier this year the company fined and suspended three congressional candidates after determining they placed trades tied to their own election contests.

The Santos case adds to a growing list of regulatory and compliance issues involving prediction markets. It comes shortly after another enforcement action involving political-event trading. Former Trump teleprompter operator Gabriel Perez was recently ordered by the CFTC to pay more than $172,000 after regulators found he used non-public information related to presidential speeches to profit from prediction markets.

For Santos, the latest sanctions add another chapter to a long series of controversies. He was expelled from Congress in 2023 following findings by the House Ethics Committee and later pleaded guilty to federal charges that included wire fraud, identity theft and money laundering. He received a prison sentence of seven years and was ordered to pay restitution and forfeiture totaling more than $574,000. President Trump later commuted the sentence after Santos had served less than three months in prison.