Tribal Leaders and Senators Push to Embed Prediction Market Restrictions in the Clarity Act

Tribal gaming representatives and members of the Senate Indian Affairs Committee are pressing to insert language into the Clarity Act that would keep sports and casino betting under state and tribal control. The push comes as the Senate tries to advance the cryptocurrency market structure bill on a compressed timeline.

As first reported by Yogonet International, Indian Gaming Association Vice Chairman Tehassi Hill told a Senate Indian Affairs Committee roundtable on Tuesday that the bill should prohibit sports and casino gambling through prediction markets. He urged lawmakers to specify that state and tribal gaming statutes, rather than the CFTC, hold authority.

Sen. Tina Smith, D-Minn., told the committee Congress has more than one legislative option. “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,” Smith said. She added that “Prediction markets need to abide by existing law. That seems to me to be fairly simple and non-controversial.” Smith noted the Clarity Act or the Farm Bill could serve as the vehicle.

Regulatory Authority Remains Contested

The scope of CFTC authority over prediction markets has drawn dispute for roughly a year. The Trump administration has voiced support for CFTC Chair Michael Selig‘s oversight, describing it as critically important. Selig has maintained that the agency holds “exclusive jurisdiction” and has filed suit against multiple states pursuing separate regulatory action. The CFTC is also pursuing formal rulemaking. State regulators have pushed back, arguing that some platforms operate in violation of local gaming and gambling statutes, particularly in connection with sports-related wagers.

Polymarket and Kalshi, both valued in the billions of dollars, have expanded their user base over the past year. The operators have stated a preference for CFTC oversight over state-by-state regulation.

The Narrow Legislative Window

Gaming associations view the Clarity Act, which cleared the House earlier this year, as a viable vehicle for an amendment granting states and tribal governments authority over sports betting oversight. The Senate has worked to advance the bill over the past year. Lawmakers see the coming days as decisive because the chamber departs for recess at the end of the week, after which attention turns to the November elections.

Senate Agriculture Committee Chair John Boozman, R-Ark., who guided the Clarity Act through his committee earlier this year, does not support attaching prediction market provisions to either the Clarity Act or the Farm Bill. “The problem there is that you’re conflating issues,” Boozman said. “I don’t think those things are going to happen. 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.”

This resistance highlights the counterargument that the issues should not be joined. In my three decades advising client-partners on gaming and securities matters, such jurisdictional collisions rarely resolve cleanly without explicit statutory language. The narrow window before recess will test whether tribal and state interests can secure the clarification they seek or whether the debate shifts to another vehicle.

Reporting: Yogonet International