U.S. Senator Martin Heinrich of New Mexico, along with 11 fellow Democratic senators, is advocating for modifications to two digital asset legislative proposals currently under Senate discussion. They assert that these bills could inadvertently allow online platforms to facilitate sports betting and casino-like gambling without adhering to the established state and tribal regulatory frameworks.
Heinrich is aligning with local Indigenous tribes and pueblos in New Mexico, emphasizing the need for regulations on prediction markets, which they warn could pose an “existential threat” to tribal gaming rights.
Heinrich and the other senators have requested that legislators amend the CLARITY Act and the Digital Commodity Intermediaries Act to explicitly prevent covered platforms from enabling sports betting, clarifying that these platforms cannot circumvent tribal-state gaming agreements.
The Senate Committee on Banking, Housing, and Urban Affairs and the Committee on Agriculture, Nutrition, and Forestry are currently reviewing these bills. In New Mexico, in-person sports betting is only allowed at tribal casinos. These tribes depend on gaming revenue to fund essential services, such as education, public safety, healthcare, and housing.
The “swift proliferation” of platforms facilitating sports betting and casino-style gaming “poses an existential risk to tribal sovereignty by jeopardizing the revenue streams essential for tribal governance,” state Heinrich and his colleagues.
A press release from Heinrich’s office noted that 16 tribes and pueblos from New Mexico, as well as the Indian Gaming Association and the National Congress of American Indians, have endorsed the letter. Heinrich, a Democrat, dispatched the letter Friday to the Republican chairpersons of both committees.
The senators contend that the current draft of the bills would eliminate accountability for online platforms allowing users to place bets on sports and other events. They also expressed concerns that these platforms would undermine federal tribal gambling regulations and these states’ abilities to manage gambling practices.
The letter cautioned that the proposed legislation would effectively enable prediction markets to provide online casino games and sports betting throughout the U.S., completely sidestepping the localized tribal-state regulatory systems mandated by federal law.
The unfolding congressional debate aligns with ongoing lawsuits initiated by New Mexico Attorney General Raúl Torrez, alongside several tribes and pueblos, against Kalshi, a prediction market platform alleged to have bypassed state and tribal gambling laws. These cases remain active in both state and federal jurisdictions.
U.S. Senators Tim Scott of South Carolina and John Boozman of Arkansas head the committees examining the legislation.
Without the suggested modifications, the senators warned that unregulated online gambling could threaten federal treaty obligations to tribal governments and hinder tribal self-determination, a fundamental aspect of tribal sovereignty.