Rep. Don Davis, a North Carolina Democrat, has introduced legislation that would prohibit federal candidates from trading prediction market contracts tied to their own elections.

The No Betting on Your Own Race Act would also extend the restriction to a candidate’s spouse, dependent children and authorized campaign committee. The bill would impose civil penalties of at least $10,000 for violations and amend federal election law to prevent candidates from taking financial positions on political event contracts connected to their own races.

What The Bill Covers

The bill defines a political event contract as an agreement, transaction, swap, option, derivative or other event contract that provides direct financial exposure to a federal election, primary election, caucus, candidate nomination, control of Congress or another political or governmental event designated by the Commodity Futures Trading Commission (CFTC).

For candidates, covered contracts would include those whose payouts depend on the outcome of an election or nomination contest in which they are seeking federal office. The definition would also cover contracts based on whether a person becomes or remains a candidate, as well as their 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,” said Congressman Don Davis.

The bill would prohibit covered persons from purchasing, selling, acquiring, disposing of or holding an interest in a covered election contract, either directly or indirectly. It would also prohibit candidates from directing another person to acquire or dispose of such a contract on their behalf.

Violators would face a $10,000 civil penalty for each violation or three times the net financial gain attributable to the violation, whichever is greater. Candidates who already hold a covered position when they become candidates could dispose of it within the minimum divestment period required by the trading platform.

FEC Would Maintain Candidate List

The legislation would require the Federal Election Commission (FEC) to maintain a publicly available, machine-readable list of federal candidates. The list would include each candidate’s name, office sought and candidacy dates, and the FEC would update it at least weekly. The bill would also require the FEC to coordinate with state and territorial election boards to notify candidates about the restrictions when they file for federal office.

The proposal comes as prediction markets face increased scrutiny over candidates trading contracts tied to their own campaigns. In April, three congressional candidates received fines and five-year suspensions from Kalshi after the platform determined they had traded contracts linked to their own races. Election contracts have also become a larger part of prediction market activity ahead of the November 3 midterm elections. In September, Kalshi added election markets to DoubleZero’s data platform, giving traders access to real-time order book data for political contracts.

The wider prediction market sector has continued to expand as platforms increase their focus on political events. Meanwhile, Davis has also attracted attention from the crypto industry during the 2026 election cycle, with Stand With Crypto including his House race in its advertising campaign.

Politics remains a major source of trading activity across prediction markets, with data from Artemis showing strong volumes across the sector through the first three quarters. Polymarket recorded $14.6 billion in political trading volume between Q1 and Q3, making politics its second-largest category behind sports. Kalshi also saw significant activity, with election and politics contracts generating roughly $2.07 billion in prediction market volume over the same period.