US Bill Targets Politicians Trading Election Contracts

US Representative Don Davis has introduced the No Betting on Your Own Race Act, targeting political prediction markets and election contracts. The bill would prohibit federal candidates, authorised campaign committees, spouses and dependent children from trading contracts tied to their own elections. The restrictions would cover election wins, race participation, vote share, margins, placement and nomination contests. Candidates would also be barred from directing others to trade for them or providing funds for such transactions. Violations could bring a civil penalty of at least $10,000 or three times the net gain, whichever is higher. The Federal Election Commission would publish a weekly database of federal candidates, while platforms acting in good faith to close accounts, reverse trades or report suspected violations would generally receive protection. The proposal follows Kalshi’s three-year suspension of Republican candidate Laurie Buckhout and a $2,589.96 penalty after she traded less than $1,000 in contracts linked to her own race. The case was handled under Kalshi’s platform rules rather than federal law. The bill does not name Kalshi or Polymarket, but its broad definition of political event contracts could cover both platforms. Congress is unlikely to pass the measure before the 3 November 2026 midterm elections, and it would not apply retroactively. Election contracts are therefore expected to remain available in the near term. For crypto traders, political prediction markets are a regulatory signal rather than an immediate crypto price catalyst. The proposal adds to concerns about insider trading, market manipulation, consumer protection and event-contract oversight. Short-term effects on liquidity and platform operations should be limited, but tighter regulation could affect the long-term expansion of prediction markets and broader sentiment toward event-based trading.