HR-8912-119
Referred to the House Committee on House Administration.
Sponsored by Ritchie Torres (D-NY)
What it does
This bill would amend federal election law to prohibit candidates and political committees from using campaign funds to buy or trade in prediction markets or event contracts, including instruments tied to election outcomes, legislative actions, or regulatory decisions. It would allow continued use of campaign funds for bank deposits, diversified mutual funds, ETFs, and other low-risk instruments the Federal Election Commission designates. Violations would be enforced through existing FEC civil penalty procedures, with knowing and willful violations subject to criminal fines and up to 5 years imprisonment, and the FEC could refer such cases to the Department of Justice.
Who benefits
Donors and contributors to campaigns, who would gain assurance their contributions are not being used for speculative wagers on political or economic outcomes; the broader public interest in campaign finance transparency; and prediction-market critics concerned about candidates profiting from bets tied to their own official actions.
Who is hurt
Candidates and committees that might otherwise have used campaign cash for prediction-market investments would lose that option; prediction-market and event-contract platforms (such as Kalshi or PredictIt) would lose a category of potential customers; and committees would face added compliance costs from new FEC recordkeeping and reporting requirements.
Supporters argue
Supporters argue that allowing candidates to trade in prediction markets tied to elections or legislation creates an obvious conflict of interest, since a candidate could profit personally from betting on outcomes they have power to influence. They contend this closes a regulatory gap as prediction markets have grown rapidly and current law does not clearly address them, protecting donor funds from speculative use inconsistent with their intended purpose of supporting campaigns.
Opponents argue
Opponents argue that campaign funds are already restricted from personal enrichment uses under existing FEC rules, making this a solution to a largely hypothetical problem with no documented instances of abuse. They contend that criminalizing a broad, loosely defined category of "event contracts" could sweep in legitimate hedging or investment activity and create compliance uncertainty for committees and treasurers who must interpret an ambiguous new prohibition.
Constitutional context
Congress has authority under the Elections Clause (Art. I, §4) and its general power to regulate federal campaign finance, as recognized in Buckley v. Valeo (1976), which upheld contribution limits and disclosure requirements while striking down independent expenditure limits as speech restrictions; this bill's restriction on fund use, rather than speech itself, is less likely to trigger the same First Amendment scrutiny but could still face challenge as an indirect restriction on political committees' financial activity.
Checks and balances
Congress would expand the scope of campaign finance law enforced by the FEC, an independent multimember commission, with criminal referrals routed to the Department of Justice and subject to judicial review in prosecutions.
Historical precedent
The Federal Election Campaign Act has previously been amended to restrict personal use of campaign funds, such as the 1993 personal use ban, though no prior provision has specifically addressed prediction markets or event contracts.