Kalshi, the online prediction market platform, announced Monday that it has permanently banned former U.S. Rep. George Santos over his bets on whether he would attend the State of the Union address, while fining and temporarily banning North Carolina congressional candidate Laurie Buckhout for wagers she now describes as a "dumb mistake."

The company said its Compliance Department found reasonable cause to believe Santos, a Republican, engaged in insider trading by helping fuel speculation about whether he would attend the address — and then profited $17,839 from his trading activity when he ultimately did not show up. The case highlights a challenge that has grown alongside prediction markets themselves: when real-world political events become tradable, participants who can influence those outcomes hold an informational edge over ordinary traders — the same concern that drives insider-trading rules in traditional securities markets, though event-contract platforms rely on their own rulebooks rather than securities law to police it.

Kalshi spokesperson Elisabeth Diana confirmed it was the first permanent ban in the company's history. She added that the individuals affected by four other enforcement cases announced Monday received only temporary trading bans because they cooperated with Kalshi's investigation. The enforcement sweep comes as Kalshi, which is regulated in the United States by the Commodity Futures Trading Commission, has expanded rapidly into political and current-events contracts following court rulings that cleared the way for such markets, drawing large trading volumes and scrutiny about who is allowed to bet on outcomes they can affect.

Alongside the Santos decision, Kalshi levied a $2,589 fine and a three-year ban against Buckhout, a Republican and retired colonel running against Democratic Rep. Don Davis in a swing district in northeastern North Carolina. The platform also handed three-year bans to failed candidates for governor in California and Maine. Kalshi said Buckhout admitted placing bets of less than $1,000 on her own campaign.

"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," Buckhout said in a statement. "Safe to say my career as a Kalshi trader was short-lived."

Santos banned and fined

The lifetime ban on Santos, effective last Friday, bars him from accessing Kalshi's platform directly or indirectly. The site also imposed a $71,356 penalty on the convicted former congressman.

Santos had repeatedly discussed his intention to attend the State of the Union, which took place just four months after he was granted clemency by President Donald Trump in the fraud case that led to his expulsion from the U.S. House. On the eve of Trump's speech, Kalshi put the odds of Santos attending at close to 75%. Then, minutes into the speech, Santos posted on X that he had been waylaid at the airport — prompting several social media users to immediately accuse him of running another scheme.

An email seeking comment from Santos on Monday was not immediately returned. On X, Santos called Kalshi "an unserious company" and labeled the ban "frivolous nonsense" in one post. In another, he wrote: "thanks for the lifetime ban from your gambling platform," adding, "Let's see how much longer you guys are around for."

Kalshi's Compliance Department said Santos was prohibited from trading on his attendance plans because he was capable of influencing the outcome. Despite this, it said, he placed several large bets between Feb. 2 and Feb. 25 on whether he would attend, then spoke publicly to influence the price of those bets, including by making "false or misleading statements."

A month ago, Santos agreed to pay $35,000 to settle a federal investigation by the Commodity Futures Trading Commission into the trades. The federal probe also prompted rival prediction platform Polymarket to cut ties with Santos in June.

In March, Santos addressed complaints about his State of the Union attendance on his podcast. "I guess people lost money," he said. "Some people made unexpected money. That's to show you how fragile these markets are."

Santos, who won office after inventing a bogus persona as a Wall Street dealmaker, was sentenced to seven years in prison after pleading guilty to fraud and identity theft in 2024. After serving just 84 days, he was ordered released by Trump, who called Santos a "rogue" but said he did not deserve a harsh sentence and should get credit for voting Republican.

Other enforcement actions

The temporary bans announced Monday also targeted Stephen Cloobeck, a timeshare mogul who briefly ran for California governor and who Kalshi says bought $10,000 worth of contracts on his own candidacy, and Ben Midgley, a businessman who briefly competed for the GOP nomination for Maine governor and bet less than $1,000 on his campaign. Cloobeck could not immediately be reached for comment.

Midgley said in a statement that he was unaware candidates were barred from supporting themselves on Kalshi when he used the platform, which he viewed as "a novelty and entertainment source."

"The moment I became aware the site preferred not to have candidates supporting themselves, I suspended any involvement," he said. "I mean it is hard to take a site seriously which allows bets on virtually anything. Obviously, the novelty has worn off. I had no winnings and made a donation to charity in accordance with Kalshi's policies."

Associated Press writers Nicholas Riccardi in Denver and Patrick Whittle in Maine contributed to this report. This story was originally featured on Fortune.com.