Prediction market platform Kalshi on Wednesday said it penalized three political candidates across three states for betting on their own races.
Kalshi said it was cracking down on “political insider trading,” weeks after the platform rolled out an initiative designed to target such activity, and a day after Gov. JB Pritzker (D-IL) led Illinois in what appears to be the seventh state to bar state employees from using insider information to bet on Kalshi and other betting markets.
Kalshi fined and suspended all three individuals, who have been identified as independent candidate Mark Moran in Virginia, Ezekiel Enriquez, who ran in the Republican primary for Texas’s 21st Congressional District, and Minnesota state Sen. Matt Klein, who is a Democratic candidate for the state’s 2nd District.
“Kalshi does not tolerate anyone cheating or skirting the rules,” Robert DeNault, the company’s head of enforcement, wrote on X. “These three cases are an example of how developing proactive engineering solutions can help identify illicit trading activity, and how individuals who cooperate and take responsibility can mitigate penalties.”
Moran, a Falls Church investment banker and former reality television personality, was fined $6,229.30. Enriquez was fined $784.20. And Klein paid a $539.85 fine. The suspensions are set to last five years.
Moran claimed on Wednesday that he deliberately made the bet to see if Kalshi would follow through on penalizing him, accusing the platform of being “rife with corruption.” Moran said that as part of its settlement offer, Kalshi asked him to make a public statement, which he refused to do as he claimed it violated First Amendment protections that safeguard “both the right to speak and the right to refrain from speaking.” Kalshi upped his fine after he refused to make the statement, Moran said.
“I traded $100 on myself, knowing this would happen (also knowing that I wouldn’t be vying for the Democratic nomination) and the attention it would create to highlight how this company is destroying young men and as Senator I will go after Kalshi and impose significant penalties on them — 25% — a vice tax — to pay down our national debt,” he said in a statement posted to X.
Kalshi suggested in an enforcement update that it delivered a harsher fine to Moran because he “did not accept responsibility.”
“Two of these cases were settlements, but one was a disciplinary action,” the platform said. “The difference was cooperation: we granted settlements to traders who immediately acknowledged they violated the rules. In the other case, the trader did not accept responsibility, despite clear evidence he violated the rules. The consequence was a harsher penalty.
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“Cases like these demonstrate Kalshi’s commitment to policing all types of unfair or improper trading on our platform,” the update reads. “Regardless of the size of a trade, political candidates who can influence a market based on whether they stay in or out of a race violate our rules. No matter how small the size of the trade, any trade that is found to have violated our exchange rules will be punished.”
Moran initially planned on being a primary challenger to Sen. Mark Warner (D-VA) in the Democratic Party, but in early April made the decision to seek the Senate seat as an independent, according to Cville Right Now.
