Two U.S. congressional candidates and one sitting state lawmaker have been fined and banned by Kalshi after it was discovered they placed bets on the outcomes of their own election races, as prediction markets intensify efforts to curb insider trading.
Matt Klein, a member of the Minnesota State Senate, was fined $539 for wagering on his primary race during his campaign for the U.S. House of Representatives, scheduled for August. Ezekiel Enriquez, who ran for a U.S. House seat in March, was issued a $784 penalty, according to a settlement notice from Kalshi.
In a separate case, Virginia U.S. Senate candidate Mark Moran was fined $6,229 and ordered to forfeit any profits after allegedly failing to cooperate with the platform’s investigation. All three individuals have been banned from Kalshi for five years.
Prediction markets—platforms where users trade contracts based on the outcomes of future events—are facing increasing scrutiny over insider trading risks and potential violations of gambling regulations. Kalshi and Polymarket, the two leading platforms in the space, have both committed to tightening oversight and addressing unlawful activity.
Moran later explained his actions on X, claiming he deliberately placed the bet to test Kalshi’s enforcement mechanisms.
“YES, I did bet about $100 on myself on Kalshi because I wanted to get caught,” he wrote, adding that he wanted to find out whether the platform would take action against him and how it would handle such a case.
Klein said in a statement that he made the wager out of curiosity about how prediction markets operate, but later realized it breached the platform’s rules.
“In compliance with their request, I paid a penalty and agreed to a suspension from the platform. That was the only wager I’ve ever placed on a prediction market,” he said.
Notably, Klein is also a co-sponsor of a bill in the Minnesota Legislature that seeks to prohibit betting on real-world events such as elections and policy decisions.
Cointelegraph was unable to obtain a response from Ezekiel Enriquez.
Kalshi continues insider trading crackdown
Bobby DeNault, Kalshi’s head of enforcement, said Tuesday that while the cases violated the platform’s rules, they did not rise to the level requiring referral to the U.S. Commodity Futures Trading Commission or the Department of Justice for further action.
“Regardless of trade size, political candidates who can influence a market—such as by staying in or dropping out of a race—are in violation of our rules,” he said. “Even the smallest trades that breach our exchange rules will be penalized.”
In a separate enforcement action earlier this year, the platform imposed a $2,000 fine and a five-year ban on a former California gubernatorial candidate for betting on his own campaign.
