Rep. Don Davis introduces bill to stop federal candidates trading prediction market contracts tied to their own elections

U.S. Rep. Don Davis, D-N.C., introduced legislation on Monday that would bar federal candidates and certain family members from trading prediction market contracts tied to their own elections.

The No Betting on Your Own Race Act would apply to candidates, their spouses, and dependent children, as well as authorized campaign committees. It would prohibit them from buying, selling, acquiring, disposing of, or holding an interest, directly or indirectly, in a covered election contract. Those contracts include markets based on whether the candidate wins, remains in the race, or finishes with a particular vote share, margin, or placement.

"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 said 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

Anyone who violates the proposed ban would face a civil penalty of $10,000 per violation or three times the net financial gain attributable to it, whichever is greater. The ban also extends to indirect interest, which includes causing, directing, requesting, or inducing another person to acquire, hold, or dispose of the interest, according to the bill. It also includes knowingly providing the funds for someone else to acquire the interest.

In April, Kalshi penalized three U.S. congressional candidates for wagering on their own races and suspended each from the platform for five years. Rep. Bryan Steil, R-Wis., introduced separate legislation in June that would restrict members of Congress, their spouses, and dependents from trading prediction contracts involving certain government actions, policies, or political outcomes.

Davis' bill would require the Federal Election Commission to maintain a free, publicly available list of federal candidates and update it at least weekly. Candidates would be told about the restrictions when they file for federal office. If passed, the rules would take effect for conduct occurring from the date the bill is enacted.