Prediction market Kalshi suspends 3 congressional candidates for betting on their own races
The prediction market Kalshi said on Wednesday it had suspended accounts belonging to three congressional candidates for allegedly betting on their own races.
The candidates, named in regulatory filings as Ezekiel Enriquez in Texas, Matt Klein in Minnesota, and Mark Moran in Virginia, wagered on the outcomes of their elections in violation of the platform's rules.
Enriquez and Klein both wagered on the outcomes of their races, the platform said. But Moran, who ran as a Democrat in Virginia's primary for U.S. Senate, also placed bets on himself under the event contract, "Who will run for public office this year?" before subsequently announcing his candidacy, according to the platform.
"Moran qualified as a direct decision maker for this contract and had direct influence on the outcome of the underlying event," the filing states. Moran later also wagered on the outcome of his race, Kalshi said.
Moran "repeatedly refused to resolve this matter via settlement and stopped responding to further correspondence from [Kalshi's] Compliance Department," Kalshi said, while the other two candidates agreed to settlements with the company and admitted to breaking the platform's rules.
In a lengthy statement published on social media, Moran claimed that he bet on his own race "because I wanted to get caught," adding that he "wanted to see (1) if Kalshi would come after me and (2) what their path would be."
Bobby DeNault, Kalshi's head of enforcement, characterized the candidates' wagers as "political insider trading" in a company press release.
DeNault said these three examples violate the platform's rules.
"For more serious matters," DeNault wrote, "we refer cases to the CFTC or DOJ for further investigation and prosecution, which didn't happen here."
All three candidates were banned from the platform for five years. Enriquez faced a financial penalty of $784.20, Klein faced a financial penalty of $539.85, and Moran was levied a penalty of $6,229.30 "plus disgorgement of any profits that resulted from the trading connected to this action," the platform said.
Unlike the stock market, where insider trading is clearly defined and tightly regulated, monitoring insider trading on prediction markets has provoked fierce debate. Major industry leaders, under pressure from lawmakers, have taken steps in recent months to mitigate the perception that their product is susceptible to improper wagering on insider information.
Kalshi previously suspended the account of a candidate for governor in California who wagered on his own race.
