Tribal gaming regulators, senators make a renewed push to add prediction markets provision to Clarity Act

Senators and tribal gaming regulators are pushing to keep sports betting under state jurisdiction, resisting efforts by a federal regulator as Congress races to advance broad cryptocurrency legislation this week.

At a Senate Indian Affairs Committee roundtable on Tuesday, Indian Gaming Association Vice Chairman Tehassi Hill urged lawmakers to amend the Clarity Act to block "sports and casino gambling through prediction markets" and clarify that state and tribal gaming laws—not the Commodity Futures Trading Commission — govern those markets.

Later in the hearing, Sen. Tina Smith, D-Minn., suggested Congress could add similar language to either the Clarity Act or the Farm Bill, the sweeping legislation that sets federal agriculture and nutrition policy.

"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," she said. "Prediction markets need to abide by existing law. That seems to me to be fairly simple and non-controversial."

The regulation of prediction markets has become a hot-button issue over the past year. The Trump administration has publicly backed CFTC Chair Michael Selig to have authority over prediction markets, calling it "critically important."

'Exclusive jurisdiction'

Over the past year, Selig has argued that the agency has "exclusive jurisdiction" over the burgeoning prediction markets, suing several states in the process. Selig has also embarked on rulemaking and has said that the agency has a broad statute, despite pushback from states that say platforms are violating local gaming and gambling laws, particularly related to sports-related bets.

Meanwhile, prediction platforms like Polymarket and Kalshi have surged in popularity and are now valued at billions of dollars. They both prefer the CFTC to regulate them.

Gaming associations see a sweeping cryptocurrency bill, called the Clarity Act, as a potential avenue to include an amendment that would give states and tribal nations authority over sports betting. Senators have been working to advance the Clarity Act over the past year after it passed the House.

The next few days are viewed as pivotal in getting Clarity through the Senate as they go on recess at the end of the week and, after, are set to turn their focus on the November elections, leaving little time to pass the bill.

Senate Agriculture Committee Chair John Boozman, R-Ark., who led efforts in his panel earlier this year to advance the Clarity Act, said concerns around underage gambling and insider trading are real, but said he did not think prediction market amendments should be included in Clarity or the Farm bill.

"The problem there is that you're conflating issues," he said.

"I don't think those things are going to happen," Boozman added. "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."