Sen. Elizabeth Warren is preparing to target prediction markets once she assumes the role of Senate Banking Committee chair in January. According to a banking aide who spoke with Punchbowl News, Warren intends to address the sector’s “Wild West-style lack of oversight.”
Following the Democrats’ sweep of both chambers of Congress last week, the Massachusetts Democrat is positioned to lead a committee portfolio that includes housing, banking, cryptocurrency, and the Federal Reserve. Punchbowl outlined this legislative agenda on Monday.
To combat platform manipulation and insider trading, Warren plans to leverage the committee’s investigative powers to oversee election betting platforms and prediction markets—continuing an effort she initiated prior to the midterms.
That initial campaign was a bipartisan effort. On Oct. 28, Warren and Sen. John Curtis (R-Utah) sent a joint letter to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour. They inquired how both executives prevent campaign staff, candidates, and other individuals possessing material nonpublic information from trading election contracts.
What Warren and Curtis asked Kalshi and Polymarket
The senators expressed deep concern regarding election-related event contracts, writing, “We are particularly troubled by election-related event contracts. Event contracts tied to elections receive prominent coverage and are treated by some observers as indicators of political momentum. There are also documented cases of candidates betting on their own races, which undermines the overall integrity of the American electoral process.”
The correspondence highlighted instances of candidates trading on their own contests on Kalshi—such as a California gubernatorial race scheduled for February 2026—and cited research claiming volume manipulation and wash trading on Polymarket. It also mentioned an NPR investigation featuring campaign insiders who admitted to trading prior to the release of polling data.
“The identification of isolated instances of improper trading does not demonstrate that these markets are adequately protected,” Warren and Curtis stated. “Instead, it raises serious questions about how much similar activity may be going undetected.” The lawmakers requested written responses by Nov. 3, which was Election Day.
Robert DeNault, Kalshi’s head of enforcement, told Business Insider that the platform “proactively blocks candidates and campaign staff from trading to protect market integrity.” Polymarket did not provide a comment in response to the request.
Crypto sits inside the same Banking gavel
For bitcoin readers, prediction markets are closely linked to the cryptocurrency space. Polymarket operates as a crypto-native platform that eventually secured U.S. access via a CFTC-registered exchange after spending years operating offshore. Meanwhile, Kalshi functions as a designated contract market governed by the Commodity Futures Trading Commission. Both entities fall squarely within the jurisdiction of the committee Warren is set to lead.
Led by Chairman Michael S. Selig, the CFTC spent 2026 defending these platforms from state gambling regulations by filing lawsuits against states like New York and Wisconsin to maintain exclusive federal jurisdiction over event contracts hosted on registered exchanges. A Democratic Banking chair focused on eliminating what her aide called the Wild West serves as a direct counterweight to that regulatory stance.
Warren has consistently stood as one of the most vocal critics of cryptocurrency on Capitol Hill. She voted against the CLARITY Act market structure bill, which failed a Senate cloture vote on Sept. 15 by a margin of 49-50. Analysts suggest a Democratic Congress leaves little opportunity for a Republican rewrite, while House Democrats are currently developing their own legislative package that features an expanded role for the SEC.
Alongside prediction markets, the aide’s overview of Warren’s broader agenda includes a push to cap credit card interest rates, affordability legislation, export controls on AI chips, and rigorous oversight of Wall Street CEOs, Trump administration officials, Big Tech executives, and individuals connected to the Trump family’s crypto projects.
Ultimately, the future of prediction markets depends on whether Warren utilizes the Banking gavel and subpoena power to transform her correspondence with Kalshi and Polymarket into official hearings that fundamentally reshape how event and election contracts are regulated.
Frequently Asked Questions
Who will Elizabeth Warren chair in January?
Elizabeth Warren is set to chair the Senate Banking Committee.
Which companies received the bipartisan letter from Warren and Curtis?
Kalshi and Polymarket received the letter regarding election contract trading.
What are the main concerns raised about prediction markets?
Lawmakers highlighted concerns regarding insider trading, platform manipulation, and candidates betting on their own races.
