Dude…
Texas GOP congressional candidate Zeke Enriquez bet on the outcome of his own election on Kalshi, the prediction market said in a press release Wednesday, marking the latest sign of the industry’s newfound prevalence in the state’s politics.
Enriquez, who finished 11th in the Republican primary for Texas’ 21st Congressional District with 1.4% of the vote, traded less than $100 worth of contracts related to his own candidacy, according to Kalshi regulatory documents. Kalshi fined Enriquez $784 and suspended him from the platform for five years after a “full investigation” with which Enriquez was “fully cooperative,” the company said.
Two other political candidates, in Minnesota and Virginia, were also caught trading on their own elections and suspended from the platform, Kalshi said.
Prediction markets like Kalshi and Polymarket have faced growing scrutiny in recent months, with lawmakers and others raising concerns about insider trading and fears that the exploding industry could undermine the integrity of U.S. elections with the 2026 midterms underway. The suspensions and fines mark one of the most robust enforcement actions taken yet by a prediction market platform against political candidates, according to CNN.
A Kalshi spokesperson said the platform referred Enriquez’s case to the CFTC. It did not refer his case to any state agencies, according to the spokesperson, who said it wasn’t required.
[…]
“Cases like these demonstrate Kalshi’s commitment to policing all types of unfair or improper trading on our platform,” Bobby DeNault, Kalshi’s head of enforcement, said in the statement announcing the suspensions Wednesday. “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.”
What a dumbass. The rule broken, according to that Kalshi document, is pretty clear: “If a Trader is a decision maker, either directly or indirectly, or has any influence, directly or indirectly, no matter the scale and importance of the influence, on the outcome of the Underlying (event) of any Contract, that Trader is prohibited from attempting to enter into any trade, either directly or indirectly, on the market in such Contracts.” As anyone with even a passing familiarity with sports gambling and why players and coaches/managers are forbidden from voting on themselves or their teams, any bet you make in which you have direct influence on the outcome is one that calls into question the validity of the exercise. It doesn’t matter if you were betting on yourself to win and trying your best within the rules to do so. The betting markets – and yes, Kalshi and Polymarket are betting markets – can’t abide any of it and correctly refuse to split hairs on intent and purity. He Pete Rosed himself, and he got caught. End of story.
The federal government will do nothing about this sort of thing as long as Donald Trump and his grubby sons are in power. There’s nothing stopping the state from passing a law that would enact some disincentives and penalties for this. I look forward to seeing who introduces bills to this effect in the next legislative session. I will note that Dan Patrick would like to regulate prediction markets, but the feds are in their way, and Ken Paxton has declined opportunities to join with other state AGs to advocate for states that want to do this. Maybe a bill targeted specifically at candidates could pass, given that Kalshi and Polymarket have policies that align with it, but they may not want that foot in the door. It would be an entertainingly messy fight, in any event.