Key Takeaways
- Don Davis’ bill would bar federal candidates from betting on their own races.
- Kalshi banned Laurie Buckhout for 3 years, intensifying scrutiny of political betting.
- FEC would track candidates weekly, under the proposed law, while violations could trigger fines of at least $10,000.
Davis Seeks Ban on Candidates Betting on Their Own Elections
U.S. Representative Don Davis, D-N.C., has introduced legislation in the House of Representatives to prohibit federal candidates, their immediate family members and their authorized campaign committees from trading prediction market contracts based on the outcome of their own elections.
The measure seeks to amend Title 52 of the United States Code to crack down on political event trading by individuals directly involved in congressional or presidential campaigns.
“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. “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.”
The lawmaker urged Congress to pass the legislation to ensure all federal candidates and campaign committees understand the restriction.
Davis’ draft legislation comes weeks after prediction market platform Kalshi suspended his election opponent, Republican Laurie Buckhout, for three years after discovering she had bought event contracts tied directly to the outcome of her House race. In August 2026, former Rep. George Santos received a permanent ban from Kalshi for allegedly manipulating contracts by posting on social media that he planned to attend President Donald Trump’s State of the Union address, while secretly placing bets that he would not attend.
Under the draft bill, violators would face a civil fine of $10,000 per offense or three times the net financial gain attributable to the unlawful trade, whichever is greater. The bill defines political event contracts broadly to encompass options, swaps, derivatives, and agreements facilitated by registered exchanges, swap execution facilities, or brokerages.
Bill Targets Indirect Trades and Third-Party Betting
Covered events include primary elections, caucuses, nominating contests, vote shares, candidate placement and control of Congress. To prevent illicit trades executed through third parties, the bill penalizes indirect holdings, including situations where a candidate directs another individual to trade, retains beneficial ownership, or provides funds with knowledge of the intent to trade.
The proposal includes safe-harbor exceptions for candidates who acquire election positions prior to launching a campaign, allowing a brief divestment window mandated by platform rules once candidacy is established.
The act grants liability protections to prediction market platforms and designated contract markets. Platforms, along with their employees and officers, would not face civil liability for taking good-faith actions to enforce the rules. Platforms would also be shielded from liability when reporting suspected violations in good faith to regulatory agencies.
If enacted, the legislation would require the Federal Election Commission (FEC) to maintain a publicly accessible, machine-readable database of all registered federal candidates, updated at least weekly. Additionally, the FEC, in coordination with state and territorial election boards, would be required to explicitly notify all federal candidates of the trading prohibition when they file for office.
The legislation applies to conduct occurring on or after the date of enactment.
