Three congressional candidates wagered on the outcome of their own elections on Kalshi, according to the prediction market, which said yesterday (Wednesday) that it fined and suspended the men from their platform for five years.
It is the latest high-profile case of alleged insider trading on prediction markets including Kalshi and Polymarket, which have brought bipartisan scrutiny from Congress and calls for stricter regulations of the websites where people can put money on just about anything.
Kalshi’s disciplinary documents named Mark Moran, who is running as an independent in Virginia’s U.S. Senate race; Ezekiel Enriquez, who ran in a Texas Republican primary for a U.S. House seat; and Matt Klein, a Democratic state senator running for a U.S. House seat in Minnesota.
Klein and Enriquez both placed bets less than $100 related to their “own candidacy,” Kalshi said. Moran said on social media that he “traded $100 on myself.”
These relatively small bets follow mammoth wagers on prediction markets earlier this year that raised eyebrows. In one case, an anonymous Polymarket user made a $400,000 profit in January on a wager that former Venezuelan President Nicolás Maduro would soon be out of office.
In March, after two U.S. senators announced legislation that threatened prediction markets, Kalshi and Polymarket highlighted new rules, including against political candidates trading on their own campaigns.
Moran refused to reach an agreement with Kalshi and was fined the most at more than $6,200, while Klein and Enriquez did reach agreements and face penalties of over $530 and $780, respectively, the company said. All were suspended from Kalshi for five years.
Some politicians said the punishments didn’t go far enough. U.S. Rep. Mike Levin, a California Democrat, slammed the repercussions on social media, saying, “That’s not a punishment. That’s a parking ticket.”
The agreements are with the company, and not with the Commodity Futures Trading Commission, which regulates predication markets. The agency is chaired by Michael Selig, who is considered friendly to the burgeoning industry.
Far from denying the allegations, Moran told The Associated Press on Wednesday that he placed the bets intending to draw attention to what he said was unjust sway that platforms like Kalshi have on elections. Moran added that he’d met with the company and had asked for his name to appear on its website.
Moran said he was fined more than the other candidates because he refused to sign a settlement that would’ve required him to post a statement on X. He said he felt that the stunt was successful.
“When I piss people off, when I upset people, and when I captivate their attention, that’s when they have to start listening,” he said.
A former reality TV star and investment banker, Moran initially indicated in January that he would challenge longtime incumbent Sen. Mark Warner in the upcoming Democratic primary. However, the McLean native announced earlier this month that he has left the Democratic primary and will instead run as an independent.
Warner has never faced a primary election during his 18 years in the Senate, and it now appears that streak will remain unbroken after three other potential challengers withdrew from the race, according to the Virginia Public Access Project.
A Republican primary has been teed up for Aug. 4, with three candidates — former federal government worker and KTech CEO Kim Farrington, retired U.S. Army general Bert Mizusawa, and former CIA case officer and Reston resident David Williams — vying for the party’s nomination.
Klein also confirmed Kalshi’s findings in a post on social media on Wednesday. The $50 wager he placed in October was the first time he had used a predictions market, he said in a statement on X, and he was “curious about how it worked.”
“This was a mistake and I apologize,” he wrote, saying that the experience made it clear that the markets need more regulation.
Klein is a cosponsor of a bill working its way through the Minnesota Legislature to ban most wagering on predictive markets, including the outcome of elections. In an interview, he said he didn’t think there was an inconsistency between his betting $50 on himself to win his primary and his sponsorship of legislation.
Klein said he spent the winter learning about predictive markets and signed onto the bill well before he learned that his bet violated Kalshi’s rules.
Enriquez, known as Zeke, lost his House race in the beginning of March with less than two percent of the vote. Contact information for Enriquez was not immediately found to request comment.
