Kalshi Suspends Congressional Candidate for Trading on Own Race — Senate Already Banned Members

Kalshi disclosed on August 31 that it had suspended North Carolina congressional candidate Laurie Buckhout for three years and fined her $2,589 for trading on contracts tied to her own race against Democratic incumbent Don Davis — a rematch of their 2024 contest that Davis won by roughly 6,000 votes. Buckhout admitted to bets of less than $1,000. Kalshi said the case was part of a national investigation that found multiple politicians trading on their own races, including former Congressman George Santos. It is the first publicly known enforcement action against a candidate for prediction market insider trading.

For UK readers, the equivalent risk is an election candidate using non-public campaign intelligence — internal polling, canvassing data, endorsement timing — to trade on markets pricing their own probability of victory. The UK Electoral Commission has flagged this as a potential gap in existing financial services regulation: prediction market election contracts fall outside the Market Abuse Regulation's standard insider trading framework because elections are not 'financial instruments' in the MAR sense. In the US, Kalshi's rules fill part of this gap by prohibiting trading by anyone with influence over an outcome, but enforcement depends on the platform's own compliance rather than statutory insider trading law. The Buckhout suspension shows the enforcement mechanism works in at least one case; whether it deters the broader set of politically-connected traders with softer informational advantages is harder to assess.

The US Senate banned its members and staffers from prediction market trading on April 30, 2026 — a unanimous resolution introduced by Sen. Bernie Moreno (R-Ohio) after a US Special Forces soldier was arrested for allegedly using classified military information to bet on the outcome of a covert operation. Senate Minority Leader Schumer called on the House and Trump administration to adopt equivalent bans; neither has done so. The asymmetry — Senate members covered, House members and executive branch officials not — leaves a large set of government officials with potential access to electoral non-public information who remain free to trade on prediction markets. Whether the House follows the Senate is likely to depend on whether a high-profile House insider trading incident emerges before November 3.

CNN's September 24 feature on the 'first prediction-market election' surfaced a second integrity concern: election officials in multiple states told the outlet that prediction market prices are being used to amplify disinformation. When market odds diverge from polling consensus, candidates who are down in polls but up in markets — or vice versa — cite the discrepancy as evidence that the polls are wrong or that the election is compromised. The Wisconsin governor primary accuracy miss earlier in 2026, where Kalshi heavily favoured the losing candidate, gave critics a concrete example of prediction market error to point to. The platforms' response — that individual low-volume markets are less reliable than high-volume markets, and that overall track records remain strong — is accurate but difficult to communicate in a media environment where individual misses receive more attention than aggregate accuracy statistics. The November 3 midterms, with over $750 million in combined election contract volume, will be the largest test of prediction market electoral accuracy and integrity since the platforms began operating at scale.

Operators mentioned in this article

CFTC-regulated

Kalshi

First fully CFTC-regulated US event-contract exchange.

Crypto / On-chain

Polymarket

USDC-settled on Polygon. Largest prediction market by volume.

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