US Democratic Representative Don Davis introduced a bill on October 5 that would bar candidates in federal elections from betting on their own races. The bill prohibits candidates themselves, their spouses, dependent children, and their campaigns from buying, selling, acquiring, disposing of, or holding contracts related to their own elections, covering not only win-loss outcomes but also contracts tied to whether a candidacy continues, vote share, vote margins, and ranking. Indirect involvement, such as having others place trades or providing funds, would also count as a violation, with civil penalties of $10,000 per violation or three times the profit gained, whichever is greater. The backdrop is the rapid expansion of prediction markets; Kalshi in April suspended three federal congressional candidates for five years for betting on their own races. Because Congress is in recess until the November midterm elections, consideration before the vote is unlikely, but platforms such as Polymarket, which settles in USDC, could be included among the covered platforms, and if enacted the bill would likely push each platform to strengthen identity verification and trade monitoring.
USD CoinBill could cover Polymarket, which settles in USDC, potentially prompting stricter identity verification and monitoring on USDC-settling platforms.
