Sponsor
Ritchie Torres
Representative · D-NY
Representative · D-NY
The bill prevents campaign funds from being used in prediction markets and strengthens enforcement to protect donor funds and accountability, but it raises legal risks, creates regulatory uncertainty, and removes a hedging/research tool—imposing costs especially on smaller committees.
Candidates and authorized campaign committees are prohibited from using campaign funds in speculative prediction markets, reducing the diversion of donated funds into risky bets and protecting donor intent.
Creates enforcement tools (civil penalties and criminal referral) that strengthen accountability and deter misuse of campaign contributions by candidates and committees.
Directs the FEC to issue rulemaking and explicitly exempts low-risk instruments (insured deposits, diversified mutual funds/ETFs), giving campaigns clearer guidance on permissible, lower-risk uses of funds.
Campaign staff, treasurers, and committees face criminal penalties (fines and up to 5 years imprisonment) that raise legal stakes and increase the risk of severe consequences for inadvertent violations.
The bill's broad statutory definition of 'prediction market/event contract' could create uncertainty about whether ordinary or legitimate financial transactions are covered until the FEC issues clarifying regulations.
Campaigns that previously used prediction markets for hedging or structured research will lose a tool for risk management and information-gathering, potentially reducing campaign sophistication.
Based on analysis of 2 sections of legislative text.
Prohibits campaign funds from being used to participate in prediction markets or event contracts tied to political or economic outcomes, with FEC enforcement and criminal penalties for knowing violations.
Official title: To prohibit the use of campaign funds for prediction-market transactions, and for other purposes.
Introduced May 19, 2026 by Ritchie Torres · Last progress May 19, 2026
Prohibits candidates, authorized committees, and other political committees from using campaign funds to buy, sell, or participate in prediction markets or event contracts tied to election, legislative, regulatory, or other political/economic event outcomes. It requires the Federal Election Commission (FEC) to write implementing regulations, allows the FEC to define a narrow set of permissible low-risk instruments, adds civil and criminal penalties for knowing and willful violations, and permits FEC referral to the Department of Justice. The rule takes effect 120 days after enactment.