Tribal gaming representatives and members of the Senate Indian Affairs Committee are seeking to insert language into the Clarity Act that would keep sports and casino betting under state and tribal control, as lawmakers work against a tight legislative calendar to move the cryptocurrency market structure bill through the Senate this week.
During a Senate Indian Affairs Committee roundtable held Tuesday, Indian Gaming Association Vice Chairman Tehassi Hill called on lawmakers to amend the Clarity Act to prohibit “sports and casino gambling through prediction markets” and to specify that state and tribal gaming statutes, rather than the Commodity Futures Trading Commission, hold authority over those markets.
Sen. Tina Smith, D-Minn., told the committee that Congress has more than one legislative option available to address the issue.
“I just want to point out to the committee that I think we do have moving vehicles that could just clarify that the Commodity Futures Trading Commission, the Commodity Futures Act does not preempt IGRA [Indian Gaming Regulatory Act] or tribal-state contracts,” Smith said.
“Prediction markets need to abide by existing law. That seems to me to be fairly simple and non-controversial,” she said.
Smith said that either the Clarity Act or the Farm Bill, which sets federal agriculture and nutrition policy, could serve as a legislative vehicle for the change.
Regulatory authority remains contested
The scope of CFTC authority over prediction markets has drawn dispute for roughly a year. The Trump administration has voiced support for CFTC Chair Michael Selig’s oversight of the sector, describing it as “critically important.”
Selig has maintained that the agency holds “exclusive jurisdiction” over prediction markets and has filed suit against multiple states pursuing separate regulatory action.
The CFTC has also pursued formal rulemaking on the matter. State regulators have pushed back, arguing that some platforms operate in violation of local gaming and gambling statutes, particularly in connection with sports-related wagers.
Prediction market operators Polymarket and Kalshi, both valued in the billions of dollars, have expanded their user base over the past year and have stated a preference for CFTC oversight over state-by-state regulation.
Timeline adds pressure to ongoing talks
Gaming associations regard the Clarity Act, which cleared the House earlier this year, as a viable vehicle for an amendment granting states and tribal governments authority over sports betting oversight.
The Senate has worked to advance the bill over the past year, and lawmakers view the coming days as a decisive window: the chamber departs for recess at the end of the week, after which attention is expected to turn to the November elections, narrowing the timeframe for passage.
Senate Agriculture Committee Chair John Boozman, R-Ark., who guided the Clarity Act through his committee earlier this year, said he does not support attaching prediction market provisions to either the Clarity Act or the Farm Bill, despite acknowledging concerns about underage gambling and insider trading.
“The problem there is that you’re conflating issues,” Boozman said. “I don’t think those things are going to happen. I think you run into the same problem with Clarity in the sense that crypto is not prediction markets, so I think you’ve got to build your case. I’m very sympathetic. I want to help you.”