Rep. Don Davis Proposes ‘No Betting on Your Own Race Act’ to Ban Candidate Election Trades

U.S. Rep. Don Davis (D-N.C.) introduced federal legislation on Monday, October 5, 2026, that would prohibit political candidates from wagering on the outcome of their own elections through prediction markets. The “No Betting on Your Own Race Act” arrives five weeks after the congressman’s Republican opponent in North Carolina’s 1st Congressional District was penalized by a major trading platform for the same behavior.

The bill seeks to codify ethics in the rapidly expanding event contract space, where platforms like Kalshi allow users to trade on the probability of political outcomes. Under the proposed law, federal candidates, their spouses, dependent children, and authorized campaign committees would be barred from trading prediction market contracts tied to the candidate’s own election. Violators would face a civil penalty of $10,000 or three times the net financial gain from the trades, whichever is greater.

The legislative push follows an enforcement action taken in August 2026 against Laurie Buckhout, the Republican candidate challenging Davis. According to records from the platform, Kalshi suspended Buckhout for three years and issued a fine of $2,589.96 after she placed wagers on her own race. Buckhout admitted to placing bets totaling less than $1,000, describing the trades as a “dumb mistake.”

Violators of the proposed bill would face civil penalties of $10,000 or three times the net financial gain.

The platform’s decision was rooted in Kalshi Rule 5.17(z), which prohibits trading by individuals who possess direct or indirect influence over the outcome of an event. Within the industry, this is increasingly classified as “political insider trading,” as candidates are viewed as decision-makers who can steer campaign resources or messaging to affect the market price of their own victory or defeat.

The “No Betting on Your Own Race Act” aims to close a regulatory gap that distinguishes prediction markets from traditional equity trading. While the STOCK Act regulates how members of Congress trade stocks and securities based on non-public information, it does not explicitly address the burgeoning market for event contracts. Davis’s bill would expand these protections to ensure that those with the most direct control over an election outcome cannot profit from their foreknowledge or influence through wagering.

The issue of integrity on these platforms has gained momentum following other high-profile bans. In August 2026, Kalshi permanently banned former U.S. Rep. George Santos for insider trading related to event contracts regarding his State of the Union attendance. These enforcement actions by private platforms have intensified the debate over whether federal oversight is necessary to maintain the integrity of election-related financial markets.

Despite the introduction of the bill, it is unlikely to see significant movement before the 2026 midterms. Congress is currently in recess and is not scheduled to reconvene until after the November election, leaving the “No Betting on Your Own Race Act” as a likely priority for the following session.

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