HR-8771-119
Referred to the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
Sponsored by Ritchie Torres (D-NY)
What it does
This bill would prohibit campaign staff, consultants, vendors, and similarly affiliated individuals from trading "political event contracts" (financial instruments tied to election outcomes) while possessing confidential campaign information like internal polling or turnout data. It would also require prediction market platforms to build compliance systems to detect and report suspicious trading, and would direct the Commodity Futures Trading Commission (CFTC) to write implementing rules within 180 days and enforce violations through civil penalties.
Who benefits
Other traders on political event contract platforms who compete against campaign insiders; the general integrity of prediction markets used for forecasting elections; the CFTC, which gains new enforcement authority and referral power to the Justice Department; retail bettors who lack access to internal campaign data.
Who is hurt
Campaign staff, consultants, pollsters, and vendors who would lose the ability to trade these contracts based on information they routinely handle; prediction market platforms (e.g., Kalshi, PredictIt-type operations) that must build new compliance, monitoring, and disclosure infrastructure at their own cost; smaller platforms that may struggle to absorb compliance expenses compared to larger competitors.
Supporters argue
Supporters argue that as political event contracts grow into a multi-billion-dollar market, campaign insiders with access to unreleased polling or candidate withdrawal plans have an unfair and potentially corrupting information advantage over ordinary traders. They contend this mirrors long-established securities insider trading law and would protect market integrity before scandals erode public trust in these newer financial products.
Opponents argue
Opponents argue the bill's broad definitions—covering "any individual" who provides services to a campaign or affiliated entity, including volunteers—could sweep in low-level staff and create compliance uncertainty about who counts as covered. They contend the CFTC, an agency with no history regulating political speech or campaign operations, may struggle to enforce vague terms like "reasonably foreseeable" tipping without chilling legitimate political discussion and analysis.
Constitutional context
Congress can regulate these contracts under the Commerce Clause (Art. I, §8, cl. 3) since they are traded on federally regulated derivatives markets; because the bill delegates rulemaking to the CFTC on an emerging and high-profile market, courts applying the major questions doctrine from West Virginia v. EPA (2022) and independent review under Loper Bright v. Raimondo (2024) would likely scrutinize whether Congress gave clear enough authorization for CFTC rules defining covered conduct.
Checks and balances
Congress delegates rulemaking and civil enforcement authority to the CFTC, with federal courts reviewing enforcement actions and, post-Loper Bright, independently assessing whether CFTC rules match statutory text.
Historical precedent
Federal insider trading law for securities, developed through SEC enforcement and cases like SEC v. Texas Gulf Sulphur, offers a loose analogy, though no direct federal precedent exists for regulating insider trading in political event contracts specifically.