A Republican congressional candidate and a disgraced former congressman were both slapped with bans from prediction market Kalshi on Monday for trading on insider knowledge — the latest proof that the ruling class plays by a different set of rules than the Americans they govern.
Laurie Buckhout, the GOP nominee in North Carolina's 1st Congressional District, was fined $2,500 and suspended from the platform for three years after betting on her own campaign. She copped to it immediately. "I bet on myself. Literally," Buckhout said in a statement. "It was a dumb mistake, and as soon as I learned there was an issue, I worked to make it right. Safe to say my career as a Kalshi trader was short-lived." Kalshi said she traded less than $1,000 and cooperated with their probe.
Meanwhile, Kalshi issued its first-ever lifetime ban — against former Rep. George Santos — and hit him with more than $70,000 in penalties over allegations he manipulated markets on whether he'd attend Trump's State of the Union address. The Commodity Futures Trading Commission alleged in July that Santos made roughly $18,000 by posting on social media about his attendance plans to move the market. He paid back over $35,000 to settle CFTC charges without admitting wrongdoing. Santos was unrepentant: "Thanks for the lifetime ban from your gambling platform," he posted on X. "Let's see how much longer you guys are around for."
The pattern goes wider. POLITICO reported that a former White House teleprompter operator, Gabriel Perez, made more than $107,000 trading on what would appear in Trump's speeches. He'll pay over $172,000 to settle and caught a three-year ban. The New York Post noted an Army soldier was charged with using classified information to place a $400,000 bet on a military operation in Venezuela. Earlier this year, Kalshi suspended three minor candidates from both parties for similar conduct.
CNN, which disclosed it has a financial partnership with Kalshi and uses the platform's data in its coverage, framed Buckhout's case as "the highest-profile example to date of political insider trading" and a "growing danger." The DCCC seized on the news, with spokeswoman Madison Andrus saying Buckhout "can't be trusted to follow the most basic prediction market rules." POLITICO, which led its coverage with the Santos ban rather than the active congressional candidate, noted the company alleged Buckhout bet on whether she would win in a district that Republicans "hope to pick up in November after gerrymandering the battleground district to make it more red."
Buckhout is a retired Army colonel and former Pentagon cyber policy official who lost to incumbent Rep. Don Davis by fewer than 2 points in 2024 before Republican state lawmakers redrew the district. Trump has endorsed her, and the NRCC placed her in its "MAGA Majority" program for top recruits. Cook Political Report rates the race "Lean Republican."
The legal ground under all of this is shifting fast. Last week, the Ninth Circuit ruled Nevada can regulate Kalshi under state gambling law, contradicting a Third Circuit decision that said New Jersey cannot. A Supreme Court showdown over the multi-billion-dollar prediction market industry now looks likely.
Prediction markets were supposed to democratize information. Instead, they've handed politicians and government insiders one more way to cash in on knowledge the public doesn't have. The question is whether regulators and courts will treat this like the rigged game it's become — or let the house keep its cut.
