H.R. 10732: No Betting on Your Own Race Act

This bill would bar federal candidates, and certain people connected to them, from trading in contracts tied to the outcome of their own elections.

What it covers

The bill targets political event contracts, which are financial contracts whose payout depends on events such as:

• a federal election
• a primary, caucus, convention, or nomination contest
• control of Congress
• other political or governmental events that the Commodity Futures Trading Commission (CFTC) may define by rule

For a specific candidate, the bill focuses on contracts whose value depends on:

• the outcome of an election or nomination contest in which that person is a candidate
• whether that person becomes or remains a candidate
• the person’s vote share, margin, or placement in that contest

Who would be restricted

The prohibition would apply not only to the candidate, but also to the candidate’s:

• spouse
• dependent child
• authorized campaign committee

What would be prohibited

A covered person could not directly or indirectly buy, sell, acquire, dispose of, or hold an interest in a covered election contract related to that candidate.

The bill also treats certain actions as indirect involvement, including:

• asking or directing someone else to make the trade
• holding a beneficial interest through another arrangement
• providing money to someone else to make the trade, knowing what it will be used for

Penalties

Violations would be subject to a civil fine under existing campaign law enforcement rules. The penalty would be:

• $10,000 per violation, or
• three times the net financial gain from the violation,

whichever is greater.

Limited exception for existing positions

If someone already holds a contract and then becomes a candidate, the bill would allow them to keep or dispose of that contract for the minimum divestment period required by the trading platform. In other words, they would get a short window to unwind positions that only became prohibited after candidacy began.

Protections for trading platforms

The bill says platforms that offer these contracts would not be penalized under this section for a candidate’s violation. It also gives platforms legal protection if, acting in good faith, they:

• restrict, suspend, or close accounts
• cancel, void, or unwind positions or transactions
• report suspected violations to the CFTC, Attorney General, or Federal Election Commission

Federal Election Commission duties

The bill would require the Federal Election Commission to create and maintain a free, publicly available, machine-readable list of candidates. That list would include:

• the candidate’s name and any FEC identifier
• the office sought
• the date the person became a candidate, and if applicable, the date they stopped being a candidate

The FEC would have to update the list at least weekly.

The FEC, working with state and territorial election boards, would also have to notify candidates of these restrictions when they file for federal office.

When it would apply

The bill would apply only to conduct that happens on or after the date the law is enacted.

Relevant Companies

None found