All 11 Democratic members of the Senate Banking Committee, led by Elizabeth Warren and Catherine Cortez Masto, demanded a public hearing on prediction markets on September 23, 2026. The demand coincided with a private meeting between committee Republicans and Kalshi CEO Tarek Mansour. As monthly trading volumes on Kalshi and Polymarket reached $53 billion in July 2026, Democrats argue that contracts tied to corporate performance resemble security-based swaps and require SEC oversight rather than sole CFTC regulation.
Democratic demand for public hearing
- ▪Senate Banking Committee Democrats raised concerns in their September 23, 2026, letter on prediction markets that prediction markets are prone to market manipulation, insider trading, and consumer losses
- ▪The September 23, 2026, letter from Senate Banking Committee Democrats to Chairman Tim Scott on prediction markets was led by Ranking Member Elizabeth Warren and Senator Catherine Cortez Masto, and signed by nine other Democratic senators
- ▪All 11 Democratic members of the Senate Banking Committee sent a letter on September 23, 2026, to Republican Chair Tim Scott demanding a public, bipartisan hearing on prediction markets
Republican meeting with Kalshi
- ▪Senate Banking Committee Chair Tim Scott stated the private September 23, 2026, meeting with Kalshi was intended to understand the opportunities, challenges, and regulatory needs of securities-linked products
- ▪Senate Banking Committee Republicans held a private meeting with Kalshi CEO Tarek Mansour at 10:00 a.m. on September 23, 2026
Securities and Exchange Commission oversight
- ▪Cboe Global Markets requested Securities and Exchange Commission approval in July 2026 to list all-or-nothing options tied to corporate earnings results
- ▪The Senate Banking Committee holds jurisdiction over the Securities and Exchange Commission, which Democrats argue should oversee prediction contracts that resemble securities
- ▪Senate Banking Committee Democrats argued that prediction contracts tied to corporate performance indicators could qualify as security-based swaps subject to Securities and Exchange Commission regulation
CFTC jurisdiction and guidelines
- ▪On September 23, 2026, Commodity Futures Trading Commission staff warned exchanges that contracts settling on the actions or statements of named individuals may be presumed susceptible to manipulation
- ▪The Commodity Futures Trading Commission argued that contracts on the CFTC's registered exchanges fall under exclusive federal jurisdiction as several states challenge prediction platforms under gambling laws
Agriculture Committees and regulation
- ▪The House and Senate Agriculture Committees both weighed prediction markets regulation in the year leading up to September 2026
- ▪The Commodity Futures Trading Commission regulates event contracts on registered derivatives exchanges and is overseen by the House and Senate Agriculture Committees
Prediction market growth and statistics
- ▪Combined monthly trading volume on prediction platforms Kalshi and Polymarket more than doubled from approximately $26 billion in May 2026 to $53 billion in July 2026, according to Pew Research Center
- ▪A client note by Bernstein analysts led by Gautam Chhugani on September 22, 2026, indicated that approximately 80% of Kalshi users had never previously used a sports-betting application
- ▪Financial firm Bernstein projected that annual prediction-market trading volume will reach approximately $410 billion in 2026 and rise to about $10 trillion by 2035
Debatable claims
- ▪The SEC should regulate prediction contracts tied to corporate performance
- ▪Private congressional roundtables are an appropriate way to evaluate emerging financial technologies
- ▪Prediction markets are highly susceptible to market manipulation
- ▪Prediction markets provide genuine financial utility
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