A former member of the United States Congress was banned from a prediction market after a regulator found he made public statements to drive up the value of bets he already held. A prediction market is a platform where users buy and sell contracts on the outcome of real-world events. The platform is Kalshi. The banned user is George Santos.
The bets Santos held were on a question he had direct influence over: would he show up at the State of the Union address?
How the manipulation worked
Prediction markets set prices through collective expectation. If more participants decide an event is likely, the contracts that pay out when it happens rise. Holding a position and then making public statements that push others toward your preferred outcome is market manipulation.
That is what the regulator said Santos did. He held contracts tied to his own attendance at the State of the Union, then made public statements about that attendance while those positions were open. The statements, in the regulator's telling, were designed to push contract prices higher before the event settled.
Kalshi responded by banning Santos from the platform.
What made this unusual
Santos was not betting on a third party's decision or an unpredictable outside event. He was betting on his own behavior, and the regulator concluded he then made public statements to shape how others saw that behavior, pushing prices higher while his contracts were still live.