WASHINGTON – U.S. Rep. Don Davis of North Carolina has introduced legislation that would bar federal candidates and certain family members from trading prediction-market contracts tied to their own elections.
The No Betting on Your Own Race Act would apply to candidates for federal office, their spouses, dependent children and authorized campaign committees. It would prohibit them from buying, selling, acquiring, disposing of or holding a direct or indirect interest in contracts whose payouts depend on the candidate’s election outcome.
The bill defines covered contracts broadly. It includes markets based on whether a candidate wins, remains in the race, or finishes with a particular vote share, margin or placement.
A violation would carry a civil penalty of $10,000 per violation or three times the net financial gain, whichever is greater. The measure also describes indirect conduct, including directing someone else to make the trade or knowingly providing money for it.
The proposal would give trading platforms protection from liability when they act in good faith to prevent or remedy a violation, including restricting an account or canceling a position. Platforms also could report suspected violations to the Commodity Futures Trading Commission, the Justice Department or the Federal Election Commission.
The FEC would have to maintain a free, machine-readable list of federal candidates, update it at least weekly and ensure candidates are told about the restrictions when they file for office.
Davis, a Democrat representing North Carolina’s 1st Congressional District, introduced the bill Oct. 5. Independent reporting by The Block confirmed the introduction and key provisions.
The measure is a proposal, not current law. Its text says the restrictions would apply only to conduct occurring on or after enactment.
For North Carolina voters, the bill adds a federal ethics proposal to an active congressional race and raises questions about how prediction markets should handle contracts involving candidates with direct knowledge of their own campaigns.
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Photo Credit: Library of Congress / U.S. House of Representatives, public domain. Official portrait of U.S. Rep. Don Davis, Dec. 6, 2022. Source: https://commons.wikimedia.org/wiki/File:Portrait_of_Congressman_Don_Davis.jpg.
Editor’s Note: This article was drafted with the assistance of artificial intelligence and was reviewed and fact-checked by a member of the NC Political News editorial team before publication.