With less than a month to go until the midterms, political contracts in the prediction market are coming under attention. Observers hope to use them to determine whether they can accurately predict the winners of elections across the United States. However, a Democratic congressman wishes to restrict candidates from trading these contracts.

North Carolina Democratic Federal Representative Don Davis ( Don Davis ) introduced a bill on Monday that prohibits federal public office candidates from trading predictive market contracts related to their own elections. Davis' office disclosed this information exclusively to CNBC.

This project, named"Ban on Betting on One's Own Election Bill"The proposal ( No Betting on Your Own Race Act ) was put forward during a formal meeting of the U.S. House of Representatives, with the aim of officially enshrining the practices currently being implemented by the platform into law. Due to concerns regarding insider trading, prediction market platforms have been actively restricting individual candidates from trading contracts related to their own elections.

According to Davis' proposal, if anyone is found trading event contracts related to their own candidacy, they will be fined $10,000, or a fine equivalent to three times the net profit from the violation, whichever is higher.

In his statement, Davis said: "We do not want athletes to bet on their own matches. Candidates running for federal elective offices should also be treated in exactly the same way and should not be allowed to trade contracts related to their elections. In order to establish consistency and ensure that all federal candidate committees understand this, Congress must pass this common-sense legislation."

Davis introduced the bill following a controversy involving his Republican opponent, Laurie Buckhout ( Laurie Buckhout ), from North Carolina's 1st Congressional District. This district is considered a highly competitive swing district.

In August of this year, Buckhout reached a settlement with the prediction market platform Kalshi. Previously, the company alleged that she had traded contracts related to their elections. She paid a fine of just under $2,600 for these transactions and was temporarily suspended from using the platform by Kalshi for three years.

At the time, Buckhout stated in his statement, "I betted on myself, literally. It was a stupid mistake, and once I realized there was a problem, I made every effort to correct it."

At that time, Davis posted on platform X, stating that his opponent's decision to conduct these transactions was "a serious betrayal of public trust, sufficient to disqualify them."

The U.S. House of Representatives and Senate will not meet again until after the mid-term elections, which means that there is little to no possibility of this proposal being implemented during this electoral cycle.

In April of this year, the Senate passed a resolution prohibiting senators and their staff from participating in market trading predictions. Major platforms Kalshi and Polymarket welcomed this measure. However, the resolution does not extend to candidates running for seats in the U.S. Senate but who are not currently serving as senators.

The House of Representatives has not yet passed a similar ban, although relevant resolutions have been proposed.

Disclosure:CNBC has a business relationship with Kalshi, which includes customer acquisition cooperation and a small amount of equity investment.