Senate Democrats push for full Banking Committee hearing on Kalshi/Polymarket

Eleven Senate Democrats are asking Senate Banking Committee Chair Tim Scott to convene a public hearing on Kalshi, Polymarket and the risks associated with event-contract trading, according to adbytes.media. Their request would put consumer protection, market integrity and potential SEC jurisdiction before the full committee.

The Sep. 23 letter was led by Sen. Elizabeth Warren and Sen. Catherine Cortez Masto. Republican committee members met privately with Kalshi CEO Tarek Mansour that same day, according to The Block, as cited by adbytes.media. Scott said that discussion addressed securities-related products, investor use, protections for retail participants and questions requiring congressional consideration.

The jurisdiction question

The Democrats argue that certain contracts linked to corporate performance could constitute security-based swaps, potentially bringing them within SEC oversight. That classification remains an argument rather than an established determination. The hearing request therefore concerns not just safeguards for traders, but which regulator should supervise particular products.

According to adbytes.media, the CFTC has warned that contracts dependent on an identified person’s statements, appearances or actions are particularly vulnerable to manipulation. The outlet cites cases involving a former White House teleprompter operator who traded using advance knowledge of presidential speeches and former Rep. George Santos, who traded a contract concerning his attendance at the 2026 State of the Union.

Growth figures need context

Pew Research Center figures cited by adbytes.media put combined monthly Kalshi and Polymarket volume at less than $5 billion in September 2025 and nearly $24 billion in April 2026, with later reporting placing May around $26 billion. That measure uses each contract’s $1 value upon a correct outcome—not its purchase price. A contract bought for 40 cents therefore contributes $1 to the measure, meaning the totals should not be read as cash spent or profits generated.

Pew’s six-week analysis of 11,989 active Polymarket wallets found the typical account roughly broke even. The median user executed 46 trades over 10 active trading days, with an average trade of about $6.50. The average trader spent a little over $600 and lost less than $2 overall, but outcomes varied: 56% of sampled accounts lost money, 7% earned more than $1,000 and 9% lost more than $1,000.

Sports litigation and new product proposals

Sports contracts remain a separate jurisdictional dispute involving state gambling enforcement. According to adbytes.media, New Jersey asked the Supreme Court in September to review a ruling favorable to Kalshi concerning those contracts; the dispute remains unresolved. Meanwhile, Kalshi submitted rules in September for stock and ETF perpetual futures with 23-hour weekday trading and a minimum customer margin of 15.50%. The CFTC had not approved those submissions at the time covered by the report.

A separate Sep. 22 Kalshi filing proposed margin trading for selected event contracts, excluding sports. Eligibility would be restricted to participants using a registered futures commission merchant or those authorized to clear their own trades. The proposal would let eligible traders provide collateral against potential losses rather than fund their entire exposure upfront.

What it means for prediction markets

• A hearing is being sought, not announced. The Democrats’ letter signals pressure for public scrutiny, but the supplied reporting does not establish that Scott has scheduled one.
• Product classification is central. Potential SEC oversight of corporate-performance contracts is distinct from the unresolved conflict over sports contracts and state gambling authority.
• Volume is not cash committed. Pew’s payout-value methodology matters when assessing platform growth alongside wallet-level returns and consumer risk.
• Filings are not approvals. Kalshi’s proposed perpetual futures and event-contract margin arrangements should be distinguished from products already authorized or available.