Rep. Don Davis, D-N.C., has introduced the No Betting on Your Own Race Act that would impose penalties of at least $10,000 on federal candidates who trade prediction market contracts tied to their own elections. According to Davis' October 5 announcement, the legislation would prohibit federal candidates, their spouses, dependent children and authorized campaign committees from buying, selling or holding certain election-related event contracts. The proposed restrictions would apply to contracts based on whether a candidate wins an election, remains in a race, or achieves a particular vote share, margin, or placement, covering contracts connected to primaries, caucuses, conventions and other nomination contests.
Under the bill, violations would carry a civil penalty of $10,000 or three times the net financial gain, whichever is higher. The legislation extends beyond direct candidate trading to include indirect trades conducted through other people, such as when a candidate directs or requests another person to acquire or dispose of a covered contract. The Federal Election Commission would be required to maintain a free, machine-readable list of federal candidates and update the database at least once each week. Prediction market operators and brokers would not face penalties simply for facilitating a prohibited transaction, but would be protected for taking good-faith measures to close accounts, void or unwind trades, and report suspected violations.
The legislation follows Kalshi's disciplinary action against Laurie Buckhout, the Republican candidate challenging Davis in North Carolina's 1st Congressional District. In August, Kalshi suspended Buckhout for three years after finding she had purchased less than $1,000 worth of contracts tied to her own congressional race, imposing a $2,589.96 financial penalty. Buckhout cooperated with the platform's investigation and stated, "I bet on myself. Literally. It was a dumb mistake, and as soon as I learned there was an issue, I worked to make it right." Kalshi's rules treat political candidates as people capable of directly influencing race outcomes and restrict them from trading contracts linked to those contests.
The proposal follows earlier congressional efforts to restrict elected officials from trading prediction market products. In June, House Administration Committee Chair Bryan Steil worked to add prediction market restrictions to H.R. 7008, a congressional stock-trading proposal, stating that members of Congress should not trade contracts linked to elections or public policy outcomes. On September 23, all 11 Democrats on the Senate Banking Committee called for a hearing on prediction markets after Republican committee members met with Kalshi CEO Tarek Mansour, asking Chair Tim Scott to hold a public hearing on the products' effects on consumers and the financial system.
Davis introduced the legislation during a pro forma House session, leaving little time for congressional action before the November 3 midterm elections. The House is not expected to resume regular voting until November 9, six days after the elections. Even if lawmakers later approve the proposal, its restrictions would apply to conduct occurring from the date the legislation becomes law rather than retroactively covering trades made during the current election cycle. Political event contracts remain available during the 2026 campaign, with Kalshi currently listing markets tied to control of the House and Senate, individual congressional races, and other U.S. political outcomes.
