Don Davis proposes bill to fine candidates $10K for trading on their own elections

US Rep. Don Davis (D-N.C.) introduced the “No Betting on Your Own Race Act” on October 5, 2026, targeting a gap in existing ethics rules that has grown more visible as political prediction markets have moved from novelty to mainstream.

The bill would prohibit federal candidates and their immediate family members from trading on any prediction market tied to their own elections. Violations would carry a civil penalty of $10,000 per infraction, or three times the net financial gain from the trade, whichever turns out to be larger.

What sparked the legislation

Davis did not introduce this bill in a vacuum. The direct trigger was a case involving his own Republican opponent, Laurie Buckhout, who settled with prediction market platform Kalshi in August 2026 after trading contracts linked to her own candidacy.

The Kalshi settlement cost Buckhout approximately $2,600 and came with a three-year suspension from the platform. That penalty, by most standards, is not exactly a deterrent sized to match the seriousness of the offense.

The case also illustrated a basic structural problem: the rules that currently exist are voluntary. Kalshi and other prediction market platforms have their own bans on candidates self-trading, but those are platform policies, not law. A platform ban means a settlement and a suspension. A federal law means something with real teeth.

The regulatory landscape prediction markets now inhabit

An earlier Senate resolution attempted to address related concerns, but it only covered sitting senators and their staff. Davis’s bill is designed to fill that gap, extending the prohibition to all federal candidates and their families, not just those already holding office.

The distinction matters because candidates who are not yet in office are also not yet subject to the same ethics frameworks that govern sitting members of Congress. A challenger running against an incumbent operates in a thinner regulatory environment, which is precisely where the Buckhout situation unfolded.

Passage prospects and what the industry is watching

Congress’s schedule between now and the November 2026 elections leaves limited room for new legislation to advance, and the “No Betting on Your Own Race Act” does not appear to have the kind of bipartisan momentum that tends to accelerate passage.

For prediction market platforms, the bill is largely a formalization of rules they have already adopted voluntarily. Kalshi’s own policies already prohibit candidates from trading on their races, which is why Buckhout’s case ended in a settlement rather than being treated as acceptable conduct.