Gallego, Banking Colleagues Demand Public Hearing on Prediction Markets Following Reports of a Republican-only Roundtable with Industry Executives

Following reports of Chairman Scott’s plan to hold a Republican-only private roundtable with prediction market executives, all eleven Banking Democrats call for a transparent, public hearing on the industry’s impacts. WASHINGTON – Today, Senator Ruben Gallego (D-AZ) and his Democratic colleagues on the Senate Banking, Housing, and Urban Affairs Committee wrote to Chairman Tim Scott (R-SC) requesting a public hearing on prediction markets following recent reports that he plans to hold a Republican-only roundtable this week on prediction markets with industry, including representatives from Kalshi. “It is important for the Senate Banking Committee to hold a public hearing about how these markets are impacting consumers and our financial system,” wrote the Banking Committee Democrats. “Security-based prediction markets are a growing segment of the financial sector that institutional and retail investors are increasingly exposed to. These markets offer event contracts tied to corporate performance indicators, which could meet the definition of security-based swaps that would be subject to SEC regulation.” “Experts warn that prediction markets are prone to encourage market manipulation and insider trading; and early research indicates that ‘profits are highly concentrated in a small fraction of users, while the majority lose money,’” the senators continued. “In the interest of transparency, we ask you to hold a public committee hearing on this critical topic and allow all members of the Committee to participate,” the senators concluded. In addition to Senator Gallego, the letter was signed by Senators Elizabeth Warren (D-MA), Catherine Cortez Masto (D-NV), Jack Reed (D-RI), Mark Warner (D-VA), Chris Van Hollen (D-MD), Tina Smith (D-MN), Raphael Warnock (D-GA), Andy Kim (D-NJ), Lisa Blunt Rochester (D-DE), and Angela Alsobrooks (D-MD). Senator Gallego has consistently urged federal regulators to follow the law and prohibit gaming and sports prediction market contracts. Read the full letter HERE .