Senate Banking Democrats Urge Chair Scott to Hold Public Prediction Markets Hearing

All eleven Democratic members of the Senate Banking Committee urged Chair Tim Scott (R-SC) to hold a public hearing on prediction markets rather than a closed-door roundtable with industry executives. The Senators wrote to Chair Scott on September 23, 2026, after reports that he planned a Republican-only roundtable that week on security-based prediction markets, with executives from Kalshi reportedly in attendance.

The letter said security-based prediction markets are a growing segment of the financial sector, offering event contracts tied to corporate performance indicators that could meet the definition of security-based swaps subject to SEC regulation. The Senators noted that industry participants are requesting SEC approval for options tied to corporate earnings, and cited Pew Research Center data showing prediction market trading volume rose from $5 billion in September 2025 to $24 billion in April 2026.

The letter also cited experts warning that prediction markets are prone to encourage market manipulation and insider trading, and early research on Polymarket finding that "profits are highly concentrated in a small fraction of users, while the majority lose money." Similar concerns about corporate event contracts were raised in a comment letter urging the SEC to retain jurisdiction over the products (see prior coverage).

Led by Ranking Member Elizabeth Warren (D-Mass.) and Senator Catherine Cortez Masto (D-Nev.), the Senators asked Chair Scott to hold a public committee hearing and allow all members to participate, framing the request as a matter of transparency.