Three Politicians Banned by Kalshi Over Election Betting Scandal

Minnesota State Senator Matt Klein was fined $539 for wagering on his own US House primary, Ezekiel Enriquez was fined $784 after betting during his congressional run, and Virginia Senate candidate Mark Moran was fined $6,229 and ordered to return profits. At the same time, New York Governor Kathy Hochul signed an executive order banning state employees from using confidential government information to trade on prediction markets.

Kalshi Bans Three Political Figures

Prediction market platform Kalshi took enforcement action against three political figures after determining they placed bets on races in which they were directly involved. The cases involve two US congressional candidates and one sitting state lawmaker.

Among those penalized was Matt Klein, a current member of the Minnesota State Senate who is running for the US House of Representatives. Kalshi fined Klein $539 after he was found to have wagered on the outcome of his own primary race, which is scheduled for August. 

Notice of settlement from Kalshi

According to statements from Klein, he said the trade was motivated by curiosity and a desire to understand how prediction markets function. He later acknowledged that the wager violated Kalshi’s rules and said he complied with the company’s request by paying the fine and accepting a suspension. 

Ezekiel Enriquez was also sanctioned. He previously ran for a US House seat in March. Kalshi issued Enriquez a $784 penalty, according to its settlement notice. 

The most severe case involved Mark Moran, a candidate in Virginia’s US Senate race. Kalshi fined Moran $6,229 and ordered him to return any profits earned from the trades. The platform said the larger penalty reflected his alleged refusal to cooperate during efforts to resolve the matter. 

Moran later stated publicly that he intentionally placed a wager of roughly $100 on himself in order to test Kalshi’s compliance systems and determine whether the company would detect insider trading activity. He claimed he wanted to see both whether Kalshi would pursue enforcement and what procedures it would follow.

All three individuals received five-year bans from the platform in addition to the financial penalties.

Kalshi and other operators recently pledged to strengthen compliance systems, tighten user restrictions, and crack down on unlawful or unethical activity. The latest penalties appear to be part of that effort to demonstrate stronger oversight as the industry expands.

The controversy is especially important in Klein’s case because he co-sponsors legislation in Minnesota that would prohibit wagers on real-world outcomes like elections and government policy decisions. 

New York Bans State Workers From Prediction Markets

Meanwhile, New York Governor Kathy Hochul signed an executive order prohibiting state employees from participating in prediction markets when using nonpublic information obtained through their official duties. 

Hochul said the order is intended to prevent corruption and ensure public servants act in the interests of citizens rather than for personal financial gain. She described insider trading on such platforms as unacceptable and criticized federal leaders for failing to establish clear ethical safeguards.

Part of the executive order signed by Governor Kathy Hochul

The executive order follows a similar measure that was introduced in Illinois earlier in the week by Governor JB Pritzker. Illinois officials said their own restrictions were designed to reinforce transparency in government and prevent state workers from exploiting confidential information.

Industry interest in prediction markets has surged quite a bit, with monthly trading volumes reportedly reaching a record $23.6 billion in March. The markets now cover a wide range of subjects, from political races and entertainment results to company earnings and international developments. 

Supporters argue these platforms can provide useful public forecasting signals. On the other hand, critics warn that they may create opportunities for manipulation, insider trading, or gambling-like behavior under another name.

Hochul’s order referenced several suspicious trading episodes that have raised concerns recently. One involved a trader who reportedly placed a low-probability wager tied to Venezuelan leader Nicolás Maduro being removed from power shortly before he was captured by US forces, allegedly generating major profits. Another involved unusual market activity related to a possible invasion of Iran and speculation around the death of Supreme Leader Ayatollah Ali Khamenei. 

Under New York’s directive, state employees and officers are barred not only from trading with insider information themselves, but also from helping others profit from confidential knowledge. Violations may lead to dismissal or referral to law enforcement authorities.