Tribal gaming leaders are calling on U.S. senators to revise the CLARITY Act to impose limitations on sports and casino-style prediction markets, ensuring the new regulations do not infringe upon pre-existing gaming statutes.
The Indian Gaming Association (IGA) has indicated that tribal representatives are engaging with senators and congressional staff at its Summer Legislative Summit taking place in Washington, D.C., while lawmakers finalize the cryptocurrency market structure legislation.
IGA is advocating for two specific amendments. The first amendment would prevent federally regulated prediction markets from issuing contracts related to sports or casino-like outcomes. The second would clarify that the legislation does not supersede the Indian Gaming Regulatory Act or any other tribal, state, and federal gaming regulations.
“Indian Country stands together against what could be the most significant threat to tribal government gaming in a generation,” stated IGA Chairman David Bean.
The CLARITY Act aims to create a federal oversight framework for digital assets, dividing responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Even though it is not explicitly a gaming bill, the IGA posits that the legislation could bolster the claims of cryptocurrency-based prediction markets, permitting them to offer gambling-like products across the nation without adhering to tribal or state gaming laws.
According to the association, the bill, if not amended, “could inadvertently empower cryptocurrency-based prediction markets to proliferate online gambling throughout the country.”
Contracts associated with sports events have sparked significant disputes among prediction market operators, state regulators, and tribal gaming entities. Tribal representatives contend that these products equate to sports betting and jeopardize the gaming rights protected under federal legislation and tribal-state agreements.
“By promoting the notion that sports bets are merely ‘swaps,’ prediction markets undermine tribal sovereignty, breach governmental agreements that tribes have established with states, and jeopardize the funds our tribal nations rely on for essential services like healthcare, education, housing, public safety, language preservation, and other government services,” Bean emphasized.
Tribes are taking legal action against sports event contracts in federal court. Three California tribes have recently petitioned the Ninth Circuit to prohibit Kalshi from offering these contracts within their territories, asserting that federal commodities regulation does not negate IGRA or tribal authority over gaming. Similar lawsuits are also underway in Wisconsin and New Mexico.
IGA’s legislative initiative kicked off earlier this year when it joined forces with the American Gaming Association to urge Congress to stop the offering of sports betting and casino gambling as event contracts linked to the pending cryptocurrency legislation. This campaign gained traction in February with a congressional briefing that included tribal leaders, the National Congress of American Indians, commercial gaming organizations, and consumer advocates.
Senate negotiators are currently working to reconcile different market structure proposals from the Banking and Agriculture committees. Ongoing discussions address ethics limitations for elected officials with cryptocurrency interests, protections for decentralized finance developers, and restrictions on stablecoin rewards.
Supporters are pushing for Senate action prior to the summer recess, which is set to commence on August 10, although the bill’s trajectory remains uncertain as it still needs 60 votes to overcome filibuster hurdles.