All Democratic senators on the Senate Banking Committee have written a joint letter to Committee Chair Senator Tim Scott requesting a public hearing on prediction markets. The request comes as Republicans held a separate roundtable session with Kalshi CEO Tarek Mansour.
Led by ranking member Senator Elizabeth Warren, the Democrats emphasized the need for public oversight of an industry that has expanded significantly. They noted that prediction market platforms have recorded substantial growth, with total trading volume increasing from $5 billion in September to $24 billion in April 2026.
The letter highlighted that users traded nearly $12 billion on major prediction market platforms Polymarket and Kalshi in December alone, representing a 400% increase from the previous year. Democrats cited this growth as evidence that both retail and institutional investors now have exposure to security-based prediction markets.
The senators raised regulatory concerns in their letter, noting that some event contracts could qualify as security-based swaps subject to SEC regulation. They also pointed to industry requests for SEC approval of options tied to corporate earnings, stating that the full committee has a critical oversight role to play.
Democrats further referenced expert warnings about potential market manipulation and insider trading risks. They also cited research showing that profits are highly concentrated among a small fraction of users while the majority of participants lose money, making bipartisan examination of these markets necessary.
The letter comes one week after the CLARITY Act vote, in which all Democrats opposed the cryptocurrency bill. Some Democrats had previously called for prediction market provisions in crypto legislation to address concerns that these platforms were operating as unlicensed sports betting services.
