Federal candidates would face fines for betting on their races

Federal candidates, their spouses and dependent children, and their campaign committees would be barred from trading or holding contracts tied to the candidate’s own race. The rule would cover contracts whose outcome depends on the candidate’s contest, candidacy, vote share, margin, or placement. Indirect interests would count, including directing a trade or knowingly funding it. A person may hold or sell a contract that becomes covered when the person becomes a candidate, but only during the platform’s minimum sell-off period. Each violation would carry the greater of a $10,000 civil fine or three times the net financial gain. The restriction would cover conduct on or after enactment.

Covered trading platforms and their staff and agents would not face penalties under the candidate-trading rule. This would cover entities and intermediaries that facilitate trading in political-event contracts. They also would be protected from liability for good-faith steps to prevent or fix violations, including restricting accounts or undoing trades. Good-faith reports to the Commodity Futures Trading Commission, attorney general, or Federal Election Commission would be protected, with no notice required. These protections would apply on or after enactment.

The Federal Election Commission would maintain a public, machine-readable candidate list and arrange notice of the Act’s rules. The list would show each candidate’s name, commission identifier, office sought, and dates they entered and, if applicable, left candidacy. The list would be free and updated at least weekly. The commission would coordinate candidate notices with state and territory election boards. Candidates would receive notice when they file for federal office.