Warren Vows Crackdown on Prediction Markets as Banking Chair

Elizabeth Warren intends to impose stricter rules on prediction markets when she assumes the chair of the Senate Banking Committee in January, according to a banking aide who told Punchbowl News she would aim to end what the aide called the sector's 'Wild West-style lack of oversight.'

Warren, a Democrat from Massachusetts, is set to lead the committee following her party's victories in both houses of Congress last week, placing her in control of issues spanning banking, housing, the Federal Reserve and digital assets. Punchbowl News released the aide's outline of her priorities on Monday.

She plans to deploy the committee's investigative authority to scrutinize prediction markets and election wagering sites, focusing on insider trading and manipulations of the platforms — continuing the campaign she started ahead of the midterm elections.

That previous effort had bipartisan backing. On Oct. 28, Warren along with Republican Senator John Curtis of Utah sent a letter to Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan, inquiring about how the firms prevent candidates, campaign employees and others possessing material nonpublic information from trading on election contracts.

Senators' Questions to Kalshi and Polymarket

"We are particularly troubled by election-related event contracts," the lawmakers wrote. "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 letter referenced instances of candidates betting on their own races on Kalshi, such as a February 2026 gubernatorial election in California, and cited studies claiming wash trading and volume manipulation occurred on Polymarket. The correspondence also mentioned an NPR probe in which campaign insiders admitted to trading before polling data was made public.

"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 senators requested written responses by Election Day, November 3.

Robert DeNault, Kalshi's enforcement chief, informed Business Insider that the firm "proactively blocks candidates and campaign staff from trading to protect market integrity." Polymarket declined to comment on the matter.

Cryptocurrency Under Warren's Banking Committee Purview

For those following bitcoin, prediction markets are a relevant topic. Polymarket, a crypto-based platform, gained legal U.S. access via a CFTC-registered exchange after years operating internationally, while Kalshi functions as a designated contract market regulated by the Commodity Futures Trading Commission. Both fall under the jurisdiction of the committee Warren is soon to head.

During 2026, the CFTC under Chairman Michael S. Selig has been combating state gambling regulations against these platforms, taking legal action against Wisconsin, New York and other states to maintain sole federal authority over event contracts on registered exchanges. Warren, a Democrat who will lead the Banking Committee, aims to counter that approach with what her aide described as a crackdown on a 'Wild West' environment.

On Capitol Hill, Warren has been among the most vocal critics of cryptocurrency. She voted against the CLARITY Act market structure legislation, which was defeated in a Senate cloture vote of 49 to 50 on September 15. Analysts have suggested that with Democrats controlling Congress, there is limited chance for a Republican-led revision. House Democrats are now developing their own bill that would expand the SEC's authority.

The aide's outline for Warren also covers legislation on affordability, efforts to limit credit card interest rates, controls on exports of AI chips, and scrutiny of Trump administration officials, Wall Street chiefs, Big Tech leaders, and individuals connected to the Trump family's cryptocurrency projects.

The question for prediction markets has shifted from whether regulators from the Trump era will continue to facilitate their growth. Now it is whether Warren, armed with subpoena authority and the Banking Committee chair, will convert the letters to Kalshi and Polymarket into hearings that reshape the enforcement of election and event contracts.