Congress and Prediction Markets: Four Oversight Fronts in a Week

Chairman James Comer opened an inquiry in May 2026 with letters to Kalshi and Polymarket, which have since supplied nearly 1,000 documents and several briefings, according to The Block. Letters to Crypto.com, Hyperliquid and PredictIt followed in late September.

The letters ask about user verification, tools for detecting trades on nonpublic information and referrals to regulators over the past 2.5 years. The stated goal is to inform possible legislation barring government officials from trading these markets.

On September 23, 2026 all seven Democrats on the Senate Banking Committee asked Chairman Tim Scott for a public hearing on prediction markets. The letter arrived the morning Republicans met privately with Kalshi CEO Tarek Mansour.

Their jurisdictional hook is securities. They cited Cboe's request to list all-or-nothing options tied to company performance as a sign that some products may fall under the SEC. Scott has not committed to a hearing date.

Sen. John Curtis (R-UT) wrote on September 21 to Judiciary Chairman Chuck Grassley and Ranking Member Dick Durbin asking for an investigation of presidential family business interests. The letter cites Donald Trump Jr.'s advisory roles at Kalshi and Polymarket.

Sens. John Cornyn and Thom Tillis said they supported the request. No subpoena had been issued as of the latest reporting.

On September 23 Sen. Richard Blumenthal and Rep. Paul Tonko launched "Truth and Integrity: The Movement for Gambling Reform" with advocacy groups. They promoted the Prediction Markets Security and Integrity Act, which would create federal consumer protections and shift authority over these markets from the CFTC to the states.

The American Gaming Association opposes federal intervention, arguing states already provide protections, and the prediction-market industry disputes that its products are gambling.

The four fronts target different issues: insider trading, securities jurisdiction, political conflicts and preemption. Interest in insider trading crosses party lines, while preemption divides along the lines of the existing court fights.

Hearings and letters are not law. For operators, the nearer-term exposure is document requests and public scrutiny, and the CFTC's pending swap-definition rules may shape any later legislative debate. This is analysis of public activity, not legal advice.