Prediction Market Gambling Leads to Bans and Arrests

Leah Feiger: So, do you all remember George Santos?

Brian Barrett: How could I possibly forget?

Zoë Schiffer: Definitely! Though I didn’t expect to be discussing him again so soon.

Leah Feiger: The former US representative was expelled from Congress in 2023, facing accusations of fraud and theft, and he managed to do it all with such flair that it really captured national attention.

Brian Barrett: Just to clarify, he wasn’t merely accused—he was incarcerated.

Zoë Schiffer: Exactly, and the accusations were highly credible.

Leah Feiger: Anyway, he’s back in the news this week. On Monday, we found out that Santos received a lifetime ban from the prediction market platform Kalshi, along with a $71,000 fine, supposedly for attempting to manipulate a bet on whether he would attend Trump’s State of the Union. To share the full details, we have WIRED senior correspondent Kate Knibbs with us.

Kate Knibbs: Hi everyone, how’s it going?

Leah Feiger: Kate, it’s great to have you here. Can you walk us through my favorite story of the week?

Kate Knibbs: Absolutely! And I have to say, Santos’s antics may be illegal, but he does them with such style that it’s hard not to find it entertaining.

Zoë Schiffer: It’s a serious issue that’s surprisingly entertaining to follow.

Kate Knibbs: Exactly. So at this juncture, Santos had already been expelled from Congress and served time in jail. After his release, he was making Cameo videos for cash and living his life. He announced that he’d be attending the State of the Union, but during the event, he claimed he was stuck at the airport and wouldn’t be attending. He even said, “FML.” There was a betting market on Kalshi regarding his attendance, and someone profited significantly from that. Kalshi figured out it was him quickly because of their customer verification process. His identity was no mystery to them.

Leah Feiger: Incredible.

Kate Knibbs: And it’s against their policy to wager on events in which you’re involved—akin to market manipulation or insider trading. Before this latest news, the CFTC was already aware of the situation because Kalshi had informed them, and they had previously fined him for this incident. This week’s development followed a back-and-forth between Santos and Kalshi resulting in a $71,000 fine, followed by the decision to impose a lifetime ban. Interestingly, on the same day they made this announcement, they revealed other politicians who faced trouble for betting on themselves, and those individuals received much lighter fines and temporary bans.