Tribal leaders urge senate to bar sports prediction markets under CLARITY Act

Tribal gaming leaders are urging U.S. senators to amend the CLARITY Act to restrict sports and casino-style prediction markets and clarify that the legislation would not override existing gaming laws.

The Indian Gaming Association said tribal representatives were meeting senators and congressional staff during its Summer Legislative Summit in Washington, D.C., as lawmakers negotiate the final form of the cryptocurrency market-structure bill.

IGA is seeking two changes. The first would prohibit federally regulated prediction markets from offering contracts based on sports or casino-style outcomes. The second would state that the bill does not preempt the Indian Gaming Regulatory Act or other tribal, state and federal gaming laws.

“Indian Country is united because this is one of the greatest threats tribal government gaming has faced in a generation,” IGA Chairman David Bean said.

The CLARITY Act is intended to establish a federal regulatory framework for digital assets and divide oversight between the Securities and Exchange Commission and Commodity Futures Trading Commission.

Although it is not a gaming bill, IGA argues that the legislation could strengthen claims by cryptocurrency-based prediction markets that they may offer gambling-like products nationwide without complying with tribal or state gaming laws.

The association said the bill, without additional protections, “could unintentionally allow cryptocurrency-based prediction markets to expand online gambling nationwide.”

Sports event contracts have become a major source of conflict between prediction market operators, state regulators and tribal gaming interests. Tribes argue that the products amount to sports wagering and threaten gaming rights established under federal law and tribal-state compacts.

“By relying on the fiction that sports bets are ‘swaps,’ the prediction markets undermine tribal sovereignty, violate the government-to-government agreements tribes have built with their states, and threaten the revenues our tribal nations depend on to fund healthcare, education, housing, public safety, language preservation, and essential government services,” Bean said.

Tribes are also challenging sports event contracts in federal court. Three California tribes recently asked the Ninth Circuit to block Kalshi from offering the contracts on their lands, arguing that federal commodities regulation does not displace IGRA or tribal authority over gaming. Similar cases are pending in Wisconsin and New Mexico.

IGA’s legislative campaign began earlier in the year, when it joined the American Gaming Association in urging Congress to prevent sports betting and casino gambling from being offered as event contracts through pending cryptocurrency legislation. The effort expanded in February with a congressional briefing involving tribal leaders, the National Congress of American Indians, commercial gaming groups and consumer advocates.

Senate negotiators are now seeking to combine separate market-structure measures advanced by the Banking and Agriculture committees. Unresolved issues include ethics restrictions for elected officials with cryptocurrency interests, protections for decentralized-finance developers and limits on stablecoin rewards.

Supporters are seeking Senate action before the summer state-work period begins August 10, but the bill still faces an uncertain path to the 60 votes needed to overcome a filibuster.