US Bill Targets Candidates Betting on Prediction Markets

US Representative Don Davis has introduced the No Betting on Your Own Race Act, targeting prediction markets such as Kalshi and Polymarket. The bill would bar federal candidates, their spouses, dependent children and authorised campaign committees from trading contracts linked to their own elections. The restriction would cover contracts tied to election wins, participation, vote share, margins, rankings and nomination contests. It would also prohibit candidates from directing others to trade for them or providing funds for such transactions. Violators could face a civil penalty of at least $10,000 or three times their net gain, whichever is higher. The Federal Election Commission would maintain a weekly candidate database, while platforms that act 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 congressional candidate Laurie Buckhout after she bought less than $1,000 in contracts linked to her own race. Kalshi also imposed a $2,589.96 penalty. Congress is unlikely to pass the bill before the November 3, 2026 midterm elections, and the measure would not apply retroactively. The bill adds to US scrutiny of prediction markets over insider trading, market manipulation, consumer protection and the legal status of political event contracts. The immediate impact on crypto prices is limited because the proposal targets election contracts, not crypto assets. However, prediction markets could face tighter compliance requirements, weaker liquidity or slower expansion, potentially affecting broader sentiment toward event-based trading.