U.S. Sen. Heinrich joins New Mexico tribes in push to shield tribal gaming from prediction markets

U.S. Sen. Martin Heinrich (New Mexico) and 11 other Democratic senators are seeking amendments to two digital asset bills under negotiation in the Senate, arguing that the measures could permit online platforms to offer sports betting and casino-style gambling outside existing state and tribal regulatory systems.

Heinrich is joining local Indigenous tribes and pueblos in New Mexico in calling for rules on prediction markets, which they argue pose an “existential threat” to tribal gaming rights. 

Heinrich and the other senators have urged lawmakers to revise the CLARITY Act and the Digital Commodity Intermediaries Act to prohibit covered platforms from facilitating sports betting and to make clear that they cannot be used to circumvent tribal-state gaming compacts. 

The bills are being considered by the Senate Committee on Banking, Housing, and Urban Affairs and the Committee on Agriculture, Nutrition, and Forestry. In New Mexico, sports betting is prohibited except when conducted in person at tribal casinos. Tribes use gaming revenue to support government services, including education, public safety, healthcare, and housing.

The “rapid expansion” of platforms that allow users to wager on sports and participate in casino-style gambling “poses an existential threat to tribal sovereignty by undermining the revenue that tribes rely on for government services,” Heinrich and the other senators wrote.

According to a news release from Heinrich’s office, 16 New Mexico tribes and pueblos supported the letter, along with the Indian Gaming Association and the National Congress of American Indians. Heinrich, a Democrat, sent the letter Friday to the Republican chairmen of the two committees.

The senators argue that the bills, as currently drafted, would remove accountability for online platforms that allow users to place wagers on sports and other events. They also said the platforms bypass federal tribal gaming laws and weaken the ability of states to regulate gambling.

The letter warned that the legislation would “effectively allow prediction markets to offer online casino-style gaming and sports betting across the United States, entirely bypassing the localized tribal-state regulatory systems required” under federal law.

The congressional debate comes as New Mexico Attorney General Raúl Torrez and a group of tribes and pueblos pursue separate lawsuits against Kalshi, a prediction market platform accused by the plaintiffs of circumventing state and tribal gaming laws. Both cases remain pending in state and federal courts.

U.S. Sens. Tim Scott of South Carolina and John Boozman of Arkansas chair the committees reviewing the legislation.

Without the proposed amendments, the senators said, unregulated online gambling could undermine federal treaty obligations to tribal governments and interfere with tribal self-determination, described in the letter as a “primary pillar of tribal sovereignty.”