Senators and tribal gaming regulators are pushing to add language to the Clarity Act that would keep sports betting on prediction markets under state and tribal jurisdiction, rather than the Commodity Futures Trading Commission. The push comes as the Senate has only days left this week to advance the bill before recess.
Senators and tribal gaming regulators are pushing to keep sports betting under state jurisdiction, resisting a federal regulator's reach into prediction markets, as Congress races to advance a broad cryptocurrency bill 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 to clarify that state and tribal gaming laws, not the CFTC, govern those markets.
Tribal regulators demand a carve-out
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 legislation that sets federal agriculture and nutrition policy. She argued the change would simply confirm that federal futures law does not override tribal-state gaming agreements.
The regulation of prediction markets has become a hot-button issue over the past year. The Trump administration has backed CFTC Chair Michael Selig's push to expand the agency's authority over the sector.
CFTC claims sole authority
Over the past year, Selig has argued the agency holds sole authority over the growing prediction-markets industry, suing several states in the process. He has also pursued new rulemaking, arguing the CFTC's statute is broad, despite pushback from states that say platforms are violating local gaming and gambling laws, particularly on sports-related bets.
Meanwhile, platforms like Polymarket and Kalshi have surged in popularity and are now valued at billions of dollars. Both prefer CFTC oversight over state regulation.
A narrow window before recess
Gaming associations see the Clarity Act as a vehicle for an amendment that would hand states and tribal nations authority over sports betting. Senators have worked to advance the bill over the past year after it passed the House.
The next few days are viewed as pivotal for getting Clarity through the Senate: lawmakers go on recess at the end of the week, then turn to 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 about underage gambling and insider trading are real. But he does not think prediction-market amendments belong in Clarity or the Farm Bill. According to The Block: "The problem there is that you're conflating issues."
Source: The Block
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