North Carolina Rep. Don Davis on Monday introduced the No Betting on Your Own Race Act, which would fine federal candidates who trade, or simply hold, prediction market positions on their own elections.
Each violation would cost the greater of $10,000 or three times the net financial gain from the trade, under the campaign finance law’s enforcement provisions, according to the bill text.
“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, a Democrat, said in a statement.
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Who the Bill Covers
The ban reaches the candidate, a spouse or dependent child, and the candidate’s authorized campaign committee. Covered contracts include any market whose payout turns on the candidate’s primary, caucus, convention, nomination contest or general election, on whether they enter or stay in a race, or on their vote share, margin or placement.
Trading through someone else counts too, such as directing or knowingly funding another person’s position. A person who already holds a contract when they become a candidate would get the platform’s minimum divestment window to unwind it.
Trading platforms and brokers would face no penalty. They would also be shielded from liability for good-faith steps such as closing accounts or voiding trades, and for reporting suspected violations to the CFTC, the Attorney General or the Federal Election Commission.
The FEC would have to publish a free, machine-readable list of federal candidates, updated at least weekly, and make sure each candidate learns about the ban when they file for office. The rules would cover conduct starting the day the bill becomes law.
Davis filed the bill during a pro forma session of the House. The chamber’s next votes are expected on Nov. 9, six days after the midterm elections.
A Kalshi Penalty in Davis’ Race
Davis represents North Carolina’s 1st Congressional District. His Republican opponent in November, Laurie Buckhout, was suspended from Kalshi for three years and fined $2,589.96 in August after the exchange found she bought less than $1,000 worth of contracts on her own candidacy. Kalshi treats candidates as decision makers who are barred from trading on outcomes they can influence.
“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,” Buckhout told WITN at the time. Davis said in a statement to the station that the news his opponent “was caught, fined, and slapped with a three-year ban for trading on insider information is a disqualifying breach of public trust.”
The press release announcing the bill does not mention Buckhout.
Kalshi has used the same rule against other candidates. In April, it suspended three other candidates for Congress, in Virginia, Minnesota and Texas, for five years each. The exchange had begun screening political candidates out of their own election markets in March.
Related Listen: CME vs. Kalshi. Is Washington Picking a Winner in Prediction Markets?
