Kalshi is making headlines after announcing disciplinary actions, including a lifetime ban for former Congressman George Santos, just days after suffering a significant legal setback. This announcement comes on the heels of the Ninth Circuit Court of Appeals denying Kalshi's appeal aimed at blocking enforcement actions from the state of Nevada.
Santos was banned for manipulating a market tied to his attendance at the State of the Union address earlier this year. The timing of the announcement has drawn attention, especially from Santos, who claimed Kalshi hurried the public notice before the end of a 30-day notification period it had previously established:
"By the way @Kalshi is such an unserious company it violates its own notices and deadlines lol. On August 7th they gave us a 30-day notice and today they leaked/announced once again their frivolous nonsense. Leaking and attention seeking seem to be the M/O of this…" Santos posted on X.
Robert Denault, head of enforcement at Kalshi, stated that the permanent exclusion was partly due to Santos's lack of cooperation in their investigation. Additionally, Kalshi fined him more than $71,000.
Interestingly, Santos had previously cooperated with the Commodity Futures Trading Commission (CFTC), resulting in a $35,000 fine as part of a settlement with the federal regulator in July. His attorney, Joseph Murray, emphasized Santos's full cooperation: "Just as importantly, the Commission itself recognized Mr. Santos’s full and good-faith cooperation throughout the process, cooperation that assisted in the swift resolution of the matter. From the outset, Mr. Santos worked openly and transparently with the Commission’s team, through counsel, and the efficient conclusion of this inquiry reflects that cooperation."
Kalshi also revealed additional settlements with political candidates participating in markets concerning their electoral bids:
– **Laurie Buckhout**: A three-year ban with a fine of $2,589 for trading in a market on her candidacy for a Congressional seat in North Carolina in 2026.
– **Stephen Cloobeck**: A three-year ban with a fine of $31,770 for trading in a market on his gubernatorial bid in California in 2026.
– **Ben Midgley**: A three-year ban with a fine of $5,434 for trading in a gubernatorial market for Maine in 2026.
– **Eric Park**: A one-year ban, loss of $14,472, and a $7,342 fine for unauthorized access to another person's account in May 2026.
Each settlement is backed by regulatory filings from the company.
By taking these actions, Kalshi aims to move forward positively following one of the most challenging weeks in its history. The Ninth Circuit's unanimous rejection dealt a blow not only to Kalshi’s case but also undermined its legal argument regarding geofencing, which could lead to future challenges at the state level. Judge Ryan Nelson criticized Kalshi's claims, stating that the company failed to justify why it could not comply with Nevada's gaming laws. Kalshi’s assertion of needing to avoid sports event contracts in Nevada to abide by the Commodity Exchange Act's impartial access requirement was portrayed as misleading.
Kalshi is still awaiting a judgment on a joint appeal at the Sixth Circuit concerning cases in Ohio and Tennessee. Observers of this process noted that judges seemed skeptical of Kalshi's arguments during oral hearings.
