TLDR
- All 11 Democrats on the Senate Banking Committee asked Chair Tim Scott to hold a public hearing on prediction markets.
- The request followed a private meeting between Republican committee members and Kalshi CEO Tarek Mansour on Sept. 23.
- Kalshi and Polymarket recorded about $53 billion in combined trading volume in July, according to Pew Research Center.
- A group of state lawmakers filed a brief urging the Supreme Court to hear New Jersey’s case against Kalshi.
- Kalshi has until Nov. 9 to respond to New Jersey’s Supreme Court petition.
All 11 Democrats on the Senate Banking Committee have asked Chair Tim Scott to hold a public hearing on prediction markets. The request came in a letter dated Sept. 23.
Ranking member Elizabeth Warren and Sen. Catherine Cortez Masto led the effort. It followed reports that Republican members planned a private meeting with prediction market executives, including representatives of Kalshi.
According to The Block, Republican committee members met Kalshi CEO Tarek Mansour on Sept. 23. Scott said the talk covered securities-linked products, how investors use them, retail protections and regulatory questions for Congress.
Why Democrats Want a Public Hearing
The senators said a public session would let every committee member question industry participants. They want to examine consumer exposure, market integrity and the products being offered.
Their letter focused in part on contracts tied to company performance. The Democrats said these could qualify as security-based swaps, which would place them under Securities and Exchange Commission rules.
“The full Senate Banking Committee has a critical oversight role to play,” the lawmakers wrote. The letter presents SEC oversight as a question to examine, not a finding that covers every contract.
Kalshi has also filed rules with the SEC and the Commodity Futures Trading Commission for stock and ETF perpetual futures. The proposal includes 23-hour weekday trading and a minimum customer margin of 15.50%.
The senators pointed to fast growth at Kalshi and Polymarket. Pew Research Center found their combined monthly global trading volume rose from under $5 billion in September 2025 to about $53 billion in July 2026.
Pew said volume stayed around $47 billion in August. Sports contracts drove much of the increase.
The Democrats also raised concerns about manipulation and insider trading. In a Pew study of 11,989 Polymarket wallets, 56% lost money over six weeks from May to June.
The CFTC has warned that contracts based on what a named person says or does are open to manipulation. It has brought cases involving a former White House teleprompter operator and former Rep. George Santos.
State Lawmakers Back New Jersey at Supreme Court
A separate fight over sports contracts has reached the Supreme Court. New Jersey filed a petition on Sept. 2 asking the justices to review a Third Circuit ruling that favored Kalshi.
On Tuesday, the National Council of Legislators from Gaming States filed an amicus brief supporting New Jersey. The group argued that a ruling for Kalshi would “render states powerless” to regulate sports betting on prediction markets.
“If Kalshi’s self-described ‘sports betting’ activities are deemed beyond state regulation, then casinos, pari-mutuel operators, and other heavily regulated entities are certain to amend their business and products to seek the same status,” the lawmakers said.
Kalshi maintains that its CFTC registration places its contracts under federal oversight. A spokesperson previously said the company could not be “regulated by 50 different regulators.”
Kalshi also filed a proposal on Sept. 22 to let eligible professional traders post margin on selected event contracts. Sports contracts are excluded.
Kalshi has not yet formally responded to New Jersey’s petition. The company has until Nov. 9 to file its brief with the Supreme Court.
