All 11 Banking Democrats ask Tim Scott to move the Kalshi conversation into a public hearing

Multiply Pew Research Center's July figure of $53 billion by twelve and you get about $636 billion of annualised volume, against the roughly $410 billion Bernstein models for the whole of 2026 ^[6][16][7]. Bernstein's full-year number implies an average month near $34 billion ^[17], which sits between May's $26 billion and July's $53 billion ^[6]. The July pace runs about 55% above it ^[18]. Either the note is stale, or Bernstein counts a narrower universe than the two-platform total, or the May-to-July doubling was seasonal and gives back.

The 2035 call needs the same treatment. Getting from $410 billion to about $10 trillion in nine years is compounding at roughly 43% a year, every year ^[7][19].

The jurisdictional question is narrower than the procedural fight suggests. The CFTC regulates event contracts traded on registered derivatives exchanges and has been developing a clearer framework for them ^[10], and a February Federal Reserve paper described Kalshi as the largest federally regulated prediction market under that oversight ^[13]. Senate Agriculture holds primary CFTC oversight; Banking oversees the SEC and securities markets ^[11]. That leaves Banking one way in, and the letter takes it: contracts tied to corporate performance indicators could qualify as security-based swaps and so fall under SEC regulation ^[12].

Bernstein is forecasting exactly that product. "We expect new products such as KPI markets, which allow users to trade a single corporate metric..." wrote analysts led by Gautam Chhugani in a September 22 client note ^[8]. The same team expects financial-asset contracts, including crypto, equities and commodities, to overtake sports eventually ^[21], and found that about 80% of Kalshi users had never used a sports-betting app ^[9].

The two sides describe Wednesday's closed meeting in incompatible terms. "It is critical that Congress examine prediction markets on a bipartisan basis in a public hearing - not behind closed doors in a Republican-only, industry-friendly roundtable," the Democrats wrote ^[3]. Scott told The Block he brought Republicans and Kalshi together "to better understand the opportunities and challenges presented by securities-linked products" ^[4], and said his goal "is to ensure that America leads in financial innovation while protecting investors and providing the regulatory clarity these emerging markets need" ^[5].

Abroad, the rules are already diverging. ESMA says event contracts that qualify as financial instruments can fall under existing EU binary-options restrictions ^[14], and Cryptopolitan reported that gambling laws across parts of Asia have limited access, potentially pushing users and liquidity offshore or toward Western platforms ^[15]. Volume broken out by jurisdiction is not in the source material, so the migration claim is directional.

In my view the definitional question decides where this market sits, not the hearing. If a single listed contract on a corporate metric is ruled a security-based swap, the SEC inherits supervision of activity Bernstein already sizes in the hundreds of billions a year ^[7][12]. The counter-thesis is that none of this turns on Congress at all: the letter asks the chair for a hearing and cannot compel one ^[1], the CFTC already registers the venue ^[10], and its framework has been in development regardless of who testifies ^[10].