Rep. Don Davis (D-N.C.) introduced the "No Betting on Your Own Race Act" on October 5, 2026, a federal bill that would bar congressional candidates and their families from trading event contracts tied to their own elections, bonus.com reported, citing CNBC. The bill is the first federal legislation aimed squarely at candidate trading on prediction markets, and it arrived the same week Kalshi used its 2026 midterm transparency announcement to showcase its own enforcement against candidates who traded on themselves.
The proposal would put a defined federal penalty behind a restriction the platforms have so far enforced themselves: violators would face a $10,000 fine or three times their net gain from the trade, whichever is larger, according to the report. Davis introduced the measure during a pro forma House session, and he framed it in simple terms, comparing the practice to athletes wagering on contests they play in and saying a candidate for federal elected office should be held to the same standard.
The bill is a direct response to Kalshi's August enforcement action against Davis's own Republican opponent. Laurie Buckhout settled with Kalshi after the company found she had traded on contracts tied to her candidacy in North Carolina's 1st Congressional District, paid just under $2,600, and accepted a three-year suspension, bonus.com reported, citing CNBC. Buckhout said afterward that she had wagered on her own candidacy and called it "a dumb mistake."
Kalshi's October midterm announcement gave the enforcement story fresh oxygen, though the underlying sanctions are months old. The company's transparency post, published this week, says Kalshi has "fined and suspended four congressional candidates for trading on their own races" this year, and this week's coverage wave recapped three of those cases: Mark Moran, an independent candidate for U.S. Senate in Virginia; Matt Klein, a Democratic Minnesota state senator running for Congress; and Ezekiel Enriquez, a former Republican congressional candidate in Texas. Those three sanctions were announced earlier in 2026, Cointelegraph reported at the time: Moran was fined $6,229.30 after refusing to settle and refusing to publish an apology, while Klein ($539.85) and Enriquez ($784.20) settled and accepted five-year bans. The fourth is Buckhout.
Kalshi's enforcement framework is built around a blanket ban on anyone who can influence an election outcome trading on it, a standard the company describes as stricter than federal insider trading law. The ban covers candidates, members of Congress and their staff, campaign staff and vendors, party employees, pollsters, election officials and poll workers, and media decision desks, according to the company's announcement. Every account requires identity verification so Kalshi can screen out insiders before they trade, and the company says its surveillance scans every trade for suspicious timing and coordinated activity.
The transparency push is part of a larger credibility project. Alongside the enforcement recap, Kalshi launched Brier scores measuring forecast accuracy, low-volume tags flagging thin markets, and more prominent real-time activity feeds for its midterm markets, and it is positioning those markets as mainstream forecasting infrastructure: the Associated Press is showcasing live vote counts alongside Kalshi prices, CBS News is featuring Kalshi markets alongside its polling, and 270toWin is displaying its forecasts with live results. Naming and punishing candidates who traded on their own races is part of the same pitch: proof that the exchange polices itself.
For now, the federal bill is best understood as a marker, not a near-term law. CNBC reported that the House and Senate are not scheduled to meet again until after the midterm elections, leaving the bill with little chance of becoming law before votes are cast. The Senate took a narrower step in April, approving a resolution banning senators and staff from trading on prediction markets, but that did not extend to non-incumbent candidates, and the House has not passed a similar ban.
Analysis: the real story this week is the convergence, not the sanctions. Kalshi is fighting a two-front war: state attorneys general and gaming commissions suing over sports contracts, and a federal legislative push that could define event contracts out of existence. A sitting congressman introducing a bill that formalizes Kalshi's own platform rule is, in one sense, a win for the venue: it validates the self-policing model. But it also moves the locus of control toward Washington, where the CFTC's pending event-contract rulemaking will ultimately decide how cleanly these products sit under federal jurisdiction. The open questions are whether Davis's bill gets committee time when Congress returns, whether the Senate's insider-trading resolution gets extended to candidates, and whether Polymarket, QCEX, and the onchain venues publish equivalent enforcement records. Watch the lame-duck session and the CFTC rulemaking next.