Members of the Senate Indian Affairs Committee, alongside tribal gaming representatives, are advocating for amendments to the Clarity Act. Their aim is to ensure that both sports and casino betting remain under the jurisdiction of state and tribal authorities. This push comes as lawmakers are racing against a tight legislative schedule to advance the cryptocurrency market structure bill through the Senate this week.
During a recent roundtable discussion held by the Senate Indian Affairs Committee, Tehassi Hill, Vice Chairman of the Indian Gaming Association, urged legislators to modify the Clarity Act. He proposed that the Act should explicitly ban 'sports and casino gambling through prediction markets' and clarify that authority over these markets lies with state and tribal gaming laws, rather than the Commodity Futures Trading Commission (CFTC).
Senator Tina Smith from Minnesota emphasized to the committee that Congress has several legislative avenues to tackle this matter. She remarked, 'I want to highlight that we have options that could clarify that the CFTC and the Commodity Futures Act do not override the Indian Gaming Regulatory Act (IGRA) or tribal-state agreements.'
Smith expressed that prediction markets should comply with existing laws, stating, 'That seems straightforward and non-controversial.' She indicated that either the Clarity Act or the Farm Bill, which outlines federal agricultural and nutrition policies, could serve as a legislative vehicle for these changes.
The authority of the CFTC over prediction markets has been a contentious issue for nearly a year. The Trump administration has supported CFTC Chair Michael Selig's regulatory oversight, deeming it 'critically important.' Selig has asserted that the agency possesses 'exclusive jurisdiction' over prediction markets and has initiated legal action against several states that are pursuing their own regulatory measures.
Additionally, the CFTC is actively engaging in formal rulemaking regarding this issue. State regulators have raised concerns, arguing that certain platforms are operating in breach of local gaming laws, particularly concerning sports betting.
Prediction market operators like Polymarket and Kalshi, both valued in the billions, have seen their user base grow over the past year and have expressed a preference for CFTC oversight rather than state-by-state regulations.
Gaming associations view the Clarity Act, which passed in the House earlier this year, as a potential vehicle for amendments that would empower states and tribal governments to oversee sports betting.
The Senate has been working to push the bill forward over the past year, with lawmakers recognizing the urgency of the upcoming recess at the end of the week. After that, focus is expected to shift towards the November elections, which could limit the time available for the bill's passage.
Senate Agriculture Committee Chair John Boozman from Arkansas, who facilitated the Clarity Act's progress in his committee, expressed his opposition to including prediction market provisions in either the Clarity Act or the Farm Bill. He acknowledged concerns regarding underage gambling and insider trading but stated, 'The issue is that you're mixing different topics. I don't believe those issues will materialize. Crypto and prediction markets are distinct, and you need to build your case. I am sympathetic and want to assist you.'