Tribal gaming leaders and members of the Senate Indian Affairs Committee are pushing to incorporate provisions into the Clarity Act that would maintain sports and casino wagering under state and tribal jurisdiction, as lawmakers strive to navigate a compressed legislative schedule to advance the cryptocurrency market structure bill through the Senate this week.

During a Senate Indian Affairs Committee discussion held on Tuesday, Indian Gaming Association Vice Chairman Tehassi Hill urged legislators to revise the Clarity Act to prevent “sports and casino gambling via prediction markets”, and to clarify that state and tribal gaming laws, rather than the Commodity Futures Trading Commission (CFTC), should govern those markets.

Sen. Tina Smith, D-Minn., informed the committee that Congress has multiple legislative pathways available to tackle this issue.

“I want to emphasize to the committee that we certainly have viable options that could clarify that the Commodity Futures Trading Commission, under the Commodity Futures Act, does not override the Indian Gaming Regulatory Act (IGRA) or tribal-state agreements,” Smith stated.

“Prediction markets must comply with existing regulations. This idea seems straightforward and non-controversial,” she noted.

Smith indicated that either the Clarity Act or the Farm Bill, which outlines federal agricultural and nutritional policy, could be a legislative vehicle for these amendments.

Regulatory Authority Remains Disputed

The extent of CFTC’s jurisdiction over prediction markets has been a point of contention for approximately one year. The Trump administration has expressed support for CFTC Chair Michael Selig’s oversight of this sector, naming it “critically important.”

Selig has asserted that the agency possesses “exclusive jurisdiction” over prediction markets and has initiated lawsuits against several states that are pursuing independent regulatory actions.

The CFTC has also been engaged in formal rulemaking on this topic. State regulators have opposed these actions, contending that certain platforms operate contrary to local gambling laws, particularly concerning sports-related bets.

Operators of prediction markets such as Polymarket and Kalshi, both valued in the billions, have broadened their user bases over the past year, expressing a preference for CFTC oversight over state-specific regulation.

Legislative Timeline Intensifies Discussions

Gaming associations view the Clarity Act, which passed the House earlier this year, as a viable proposal for an amendment that would empower states and tribal governments to oversee sports betting.

The Senate has been advancing this bill for the past year, and lawmakers consider the upcoming days crucial; the chamber is scheduled to recess at the end of the week, shifting focus towards the November elections and constraining the timeframe for passage.

Senate Agriculture Committee Chair John Boozman, R-Ark., who facilitated the Clarity Act’s passage through his committee earlier this year, expressed that he is not in favor of linking prediction market provisions to either the Clarity Act or the Farm Bill, though he acknowledged concerns regarding underage gambling and insider trading.