Rep. Don Davis proposes legislation to prohibit federal candidates from trading prediction market contracts on their own races

The introduced measure encompasses candidates, marital partners, minor children, and approved campaign committees, establishing a $10,000 baseline fine for every infraction.

Representative Don Davis, a Democrat from North Carolina, put forward a proposal on Monday designed to prevent federal candidates and specific relatives from trading prediction market contracts related to their individual electoral contests.

Known as the No Betting on Your Own Race Act, the bill would target candidates, along with their husbands or wives and dependent children, together with any authorized campaign committees. It restricts them from purchasing, selling, obtaining, getting rid of, or maintaining any direct or indirect stake in a designated election contract. Such contracts encompass prediction markets centered on whether a candidate secures victory, stays in the contest, or achieves a specific vote percentage, margin, or standing.

“We don’t want our athletes to bet on their games. A candidate running for federal elected office should be treated exactly the same and should not be allowed to trade on their own election,” Davis expressed in a statement. “The No Betting on Your Own Race Act aims to prevent market interference, insider trading, as well as candidates and their family members from cashing in.”

$10,000 penalty per violation

Any individual found breaching the suggested restriction would encounter a civil fine of $10,000 for each offense or triple the total financial profit tied to it, whichever amount is higher. The prohibition additionally covers indirect stakes, which involves prompting, commanding, asking, or encouraging a third party to buy, keep, or liquidate the interest, based on the legislative text. It also covers intentionally supplying the money for someone else to secure that interest.

Back in April, Kalshi sanctioned three American congressional candidates for gambling on their respective campaigns and barred each from using the platform for a half-decade period. Representative Bryan Steil, a Republican from Wisconsin, proposed a distinct bill in June that would ban members of Congress, their partners, and dependents from engaging in prediction contract trades concerning specific legislative actions, policies, or political results.

The legislation sponsored by Davis would mandate that the Federal Election Commission provide a complimentary, accessible registry of federal candidates, refreshing it at a minimum of once a week. Candidates would receive notification regarding these limitations upon registering for federal office. Should it become law, the regulations would apply to actions taking place from the date of enactment onward.