All Democratic senators on the Banking Committee have written a joint letter to the Committee‘s Chair, Senator Tim Scott, requesting a public hearing on prediction markets. This comes amid the meeting that Republicans reportedly held with Kalshi’s CEO today as part of a roundtable session on prediction markets.
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Senate Banking Democrats Call For Public Prediction Markets Hearing
In a letter addressed to Senator Tim Scott, the Democrats led by ranking member Senator Elizabeth Warren requested that the Senate Banking Committee hold a public hearing on prediction markets. They further cited reports that Senator Scott had planned a roundtable session on these markets with only Republican members of the Committee.
“The reports claim that executives from Kalshi will be in attendance. It is important for the Senate Banking Committee to hold a public hearing about how these markets are impacting consumers and our financial system,” the letter read. The meeting, which Punchbowl first reported on last week, reportedly took place today between Republicans and Kalshi CEO Tarek Mansour, according to the Block.
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Commenting on the need for the public hearing, Democrats highlighted how security-based prediction markets have become a growing segment of the financial sector to which both retail and institutional investors have exposure. They also mentioned that some event contracts could qualify as security-based swaps, which would subject these platforms to SEC regulation.
The letter from Democrats comes just a week after the failed CLARITY Act vote, with all Democrats notably voting against the crypto bill. It is worth noting that before now, some Democrats had called for a prediction markets provision in the crypto bill to address concerns that these platforms were operating as unlicensed sports betting platforms.
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The Growth That These Platforms Are Recording
The Democrats also cited the growth that these platforms are recording as another reason for the public hearing. They noted that these platforms have grown rapidly over the last few years, with total trading volume jumping from $5 billion in September to $24 billion in April 2026.
Furthermore, they cited data showing that users traded nearly $12 billion on top prediction market platforms Polymarket and Kalshi last December, a 400% increase from the previous year. As industry participants request SEC approval for options tied to corporate earnings, the full Senate Banking Committee has a critical oversight role to play, the Senate Banking Democrats said.
Meanwhile, they alluded to experts warning that prediction markets could encourage market manipulation and insider trading. At the same time, research has shown that profits are highly concentrated in the hands of a fraction of users while the majority lose money, which Democrats said makes it critical to examine these markets on a bipartisan basis.