In Brief
- Rep. Don Davis (D-NC) has introduced a bill barring federal candidates from trading contracts on their own races.
- Violations would draw a civil fine of $10,000 or three times any gain, whichever is larger.
- Platforms would get immunity for closing accounts, unwinding trades and reporting suspected breaches.
A new bill introduced in the House this Monday would prohibit candidates for federal office, their spouses, and their campaign committees from purchasing or selling prediction market contracts tied to their own elections.
Introduced by Representative Don Davis (D-NC), the No Betting on Your Own Race Act would modify federal election statutes to classify such trading as a civil violation. Penalties would amount to a $10,000 fine per infraction, or three times the net financial profit, depending on which figure is higher.
We don’t want our athletes to bet on their games. Candidates running for federal elected office should be treated exactly the same and should not be allowed to trade on their own election.
Candidates from different political parties have traded on their own races, and Congress… pic.twitter.com/gBDC8h4Tki
— Congressman Don Davis (@RepDonDavis) October 5, 2026
Davis framed the proposal using a sports analogy, stating that just as athletes are not permitted to wager on their own contests, federal candidates should face the same restrictions. He noted that competitors from across the political spectrum have previously engaged in this practice and argued that legislative action is necessary to halt it.
The ban is broadly constructed. It extends beyond the candidate to include a spouse, dependent child, and any authorized campaign committee. The prohibition covers contracts resolving on election outcomes, a candidate’s continued eligibility, vote share, margin of victory, or final ranking. It also captures indirect participation, such as instructing another party to trade, maintaining a beneficial interest in a position regardless of its legal title, or knowingly funding another individual’s trade.
A significant portion of the legislation targets the prediction platforms rather than the individuals. Exchange operators and their personnel would incur no penalties and would receive legal immunity for acting in good faith to prevent violations. This protection covers restricting, suspending, or closing accounts, as well as cancelling, voiding, or unwinding positions. Furthermore, platforms could report suspected breaches to the Commodity Futures Trading Commission, the attorney general, or the Federal Election Commission without liability and without informing the reported individual.
To enable compliance screening, the FEC would be required to maintain and publish a free, machine-readable roster of all federal candidates, refreshed at least weekly. This directory would include each candidate’s name, commission identifier, office sought, and the dates of entry and exit from the race. Election authorities at the federal and state levels would also be obligated to inform candidates of these new rules upon filing.
A limited grace period is included. Acquiring or selling a position that becomes a covered contract upon a candidate’s declaration would not constitute an offense within the minimum divestment window established by the platform.
The bill’s definition of a political event contract exceeds standard races, encompassing caucuses, nominations, Congressional control, and any other political or governmental event designated by rule by the CFTC. The prohibition applies to conduct occurring from the date the law is enacted.
Historically, exchanges have managed this issue through self-regulation. Kalshi levied fines against multiple congressional candidates earlier this year regarding bets on their own races and has since suspended candidates from the platform. Separately, the CFTC is investigating former Representative Adam Kinzinger over trades linked to his presidential pardon, while agency staff recently cautioned exchanges that contracts settling on the conduct of named individuals should be presumed susceptible to manipulation.