- All 11 Democrats on the Senate Banking Committee are urging Chairman Tim Scott to hold a public, bipartisan congressional hearing on prediction markets.
- The request came the same day Senate Banking Republicans met privately with Kalshi CEO Tarek Mansour to discuss securities-linked products, investor protections and regulatory questions.
- The debate centers partly on which regulators should oversee different prediction-market products, particularly contracts tied to corporate performance and other securities-linked events.
Democrats on the Senate Banking Committee are calling for a formal congressional hearing on prediction markets as lawmakers increase their scrutiny of the rapidly expanding industry.
All 11 Democratic members of the committee signed a letter Wednesday urging Republican Chairman Tim Scott to hold a public hearing.
The lawmakers argued that the committee has a “critical oversight role to play” and said prediction markets should be examined through a bipartisan public process.
The request came as Senate Banking Republicans held a private meeting with Kalshi CEO Tarek Mansour on Wednesday.
Republicans Meet With Kalshi
Scott said the meeting with Kalshi was intended to help Republican committee members better understand the opportunities and challenges surrounding securities-linked products.
According to Scott, discussions included bringing financial innovation onshore, how investors use the products, protections for retail investors and regulatory questions Congress may need to address.
The Democratic senators criticized the party-specific format and called instead for a public hearing involving the full committee.
Signatories included Sens. Elizabeth Warren, Catherine Cortez Masto, Jack Reed, Mark Warner, Raphael Warnock, Ruben Gallego and Angela Alsobrooks, among others.
Prediction Markets Face Regulatory Questions
Prediction markets have become the subject of growing debate over which regulators and congressional committees have jurisdiction over different products.
The Commodity Futures Trading Commission has asserted a leading federal role over prediction markets, while states have challenged that position in disputes involving sports event contracts.
The House and Senate Agriculture Committees oversee the CFTC and have already examined prediction-market regulation.
The Senate Banking Committee, meanwhile, oversees the Securities and Exchange Commission, giving it a potential role when prediction markets involve securities-linked products.
Banking Committee Democrats said contracts tied to corporate performance indicators could raise questions about whether they fall within the SEC’s regulatory authority.
Securities-Linked Contracts Draw Attention
The debate is becoming more significant as prediction-market-style products move closer to traditional financial markets.
Cboe Global Markets has sought SEC approval to list “all-or-nothing options” tied to corporate earnings results, according to reporting cited by the lawmakers.
Democrats said developments involving products tied to corporate earnings strengthen the case for the full Senate Banking Committee to examine the market.
The letter itself does not schedule a hearing or change existing prediction-market rules. It adds pressure for a broader congressional examination of how securities-linked event contracts should be regulated as the sector expands.
