All 11 Democratic members of the Senate Banking, Housing, and Urban Affairs Committee formally requested a public hearing on prediction markets on September 23, 2026. The letter to Chairman Tim Scott followed reports of a private Republican-only discussion that same day with Kalshi Chief Executive Officer Tarek Mansour.

Ranking Member Elizabeth Warren and Senator Catherine Cortez Masto led the effort. The remaining signers were Senators Jack Reed, Mark Warner, Chris Van Hollen, Tina Smith, Raphael Warnock, Andy Kim, Ruben Gallego, Lisa Blunt Rochester and Angela Alsobrooks.

Democrats Cite Oversight Role and Investor Exposure

The senators stated that the full committee has a critical oversight role regarding prediction markets. They pointed to contracts linked to corporate performance indicators, which they said could meet the definition of security-based swaps subject to Securities and Exchange Commission rules. Both individual and institutional investors are gaining exposure to these products, according to the letter.

The Democrats called for a public session open to every committee member so lawmakers could question industry participants on consumer exposure, market integrity and the financial products being offered. They raised concerns about potential manipulation, trading by individuals with advance knowledge of outcomes, and research indicating that profits are concentrated among a small share of users while many others lose money.

Scott has not announced whether the committee will schedule the requested hearing.

Private Meeting and Republican Response

At 10 a.m. on September 23, Senate Banking Committee Republicans met with Kalshi CEO Tarek Mansour. In a statement, Scott said the discussion aimed to better understand the opportunities and challenges presented by securities-linked products. Topics included how investors use them, retail protections and regulatory questions for Congress.

Prediction markets have primarily fallen under the jurisdiction of the Senate Agriculture Committee and the Commodity Futures Trading Commission. A Banking Committee hearing would expand the panel’s involvement, particularly on products that may involve securities.

Rapid Growth in Trading Activity

The senators cited rapid expansion in the sector. Pew Research Center data showed combined monthly global trading volume on Kalshi and Polymarket rising from less than $5 billion in September 2025 to about $24 billion in April 2026. Volume reached approximately $53 billion in July 2026, up from $26 billion in May, with sports contracts accounting for much of the increase. A later Pew analysis placed August volume around $47 billion after a decline from the July peak.

Individuals traded nearly $12 billion on the two platforms in December 2025, a 400 percent increase from the previous year. Pew’s measure counts contracts at their $1 value if the outcome is correct rather than the price paid by traders.

A Pew study of 11,989 active Polymarket wallets over a six-week period from May to June found that 56 percent of sampled accounts lost money. Seven percent made more than $1,000 while 9 percent lost more than $1,000. The typical account was close to breaking even. The sample did not cover Kalshi or Polymarket’s newer U.S. platform.

Additional Regulatory Pressures

Separate developments have intensified scrutiny. Commodity Futures Trading Commission staff have flagged contracts based on what a named person says, attends or does as especially vulnerable to manipulation. The agency has called for exchanges to explain how they would identify people who could influence outcomes and detect misuse of nonpublic information. Enforcement actions have already targeted traders who used advance access or public statements to affect event-contract results.

Sports contracts raise questions about the boundary between federal derivatives oversight and state gambling laws. New Jersey has asked the Supreme Court to review a ruling favoring Kalshi, arguing that federal law does not strip states of authority over sports wagering within their borders. Kalshi maintains that its CFTC registration places the contracts under federal oversight.

Kalshi has also pursued additional product approvals, including rules for stock and exchange-traded fund perpetual futures proposing 23-hour weekday trading and a minimum customer margin of 15.50 percent. A separate September 22 filing seeks permission for eligible participants to post margin on selected event contracts rather than fund the full possible loss at the outset. Sports contracts are excluded from that proposal.

The Democratic request frames these issues as matters requiring transparent examination by the full Banking Committee rather than limited private discussions.