Rep. Don Davis Proposes Ban on Candidates Trading in Prediction Markets
- Rep. Don Davis introduces the “No Betting on Your Own Race Act” to prohibit federal candidates from trading on their own election contracts.
- The legislation proposes fines up to $10,000 for violations of the trading ban.
- The proposal comes in the wake of a trading controversy involving Davis’ opponent, Laurie Buckhout.
With midterm elections approaching in less than a month, Rep. Don Davis, D-N.C., is seeking to legislate a ban on federal candidates trading prediction market contracts associated with their own elections. His office disclosed the proposal exclusively to CNBC on Monday.
The “No Betting on Your Own Race Act” was introduced during a pro forma session of the House of Representatives. This legislation aims to formalize regulations that prediction market platforms have already been implementing to prevent candidates from trading on their own election contracts due to concerns about insider trading.
Davis’ proposed legislation would impose a penalty of $10,000 or three times the net financial gain from the trade—whichever amount is greater—on individuals found trading in event contracts related to their own candidacy. “We don’t want our athletes to bet on their games,” Davis stated. “A candidate running for federal elected office should be treated exactly the same.” He emphasized the need for Congress to pass this legislation to ensure clarity for all federal candidate campaign committees.
The push for this bill follows a controversy involving Laurie Buckhout, Davis’ Republican opponent in the competitive North Carolina’s 1st Congressional District. In August, Buckhout settled with prediction market platform Kalshi after trading on contracts related to her election, resulting in a penalty of nearly $2,600 and a three-year suspension from the platform. Buckhout later acknowledged her actions, stating, “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.”
Davis deemed Buckhout’s trading activity a “disqualifying breach of public trust” in a post made on X. However, the timeline for Congress to consider the proposal is limited; both the House and Senate are not scheduled to convene until after the midterm elections, indicating that the bill is unlikely to take effect for the current electoral cycle.
Earlier in April, the Senate passed a resolution banning senators and their staff from trading on prediction markets—an action welcomed by leading platforms Kalshi and Polymarket. However, this resolution does not extend to non-incumbent candidates vying for the U.S. Senate. Although similar proposals have been made in the House, no such ban has yet passed.
Disclosure: CNBC and Kalshi maintain a commercial relationship, including customer acquisition and a minority investment.
News Courtesy of CNBC
