U.S. gaming groups seek CLARITY Act ban on sports prediction market contracts

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CLARITY Act sports betting ban

Highlights

National gaming, tribal, and labor groups urge the Senate to amend the CLARITY Act to ban sports and casino-style prediction market contracts.
The American Gaming Association claims state gaming authorities have lost $1.08 billion in tax revenue since prediction markets began selling sports event contracts.
Ongoing regulatory conflict may escalate to the U.S. Supreme Court, as the CFTC asserts federal jurisdiction over prediction markets against state regulators.

Push to rewrite digital asset bill

As first reported by Semafor, several national gaming and tribal organizations, along with labor groups, are urging the U.S. Senate to add language to the CLARITY Act that would explicitly bar event contracts tied to sports and casino-style gaming. The groups say Congress should make clear that sports betting sits outside the Commodity Futures Trading Commission's remit and cannot be offered through prediction market platforms.

The organizations include the Indian Gaming Association and the American Gaming Association, which have joined in opposition to what they describe as gambling through prediction markets. In a letter, the coalition says prediction markets have driven the largest expansion of gambling in U.S. history over the past 18 months without voter approval or legislative authorization.

The lobbying campaign comes as the CFTC under Chair Michael Selig asserts exclusive jurisdiction over prediction markets. Selig has backed platforms including Kalshi and Polymarket in disputes with state gaming regulators, while the coalition argues the agency was created to oversee commodities and derivatives markets, not sports wagering, and lacks the expertise and infrastructure to regulate nationwide betting markets already covered by state and tribal systems.

Regulatory and tax stakes intensify

The American Gaming Association says state gaming authorities have lost about $1.08 billion in tax revenue since prediction markets began offering sports event contracts. That claim sharpens the commercial and fiscal stakes for states as federal lawmakers weigh a bill designed to shift some digital asset regulatory and enforcement authority from the Securities and Exchange Commission to the CFTC.

Some lawmakers expect the CLARITY Act to clear Congress by August, though the measure has already faced delays tied to concerns over stablecoin yield, ethics and tokenized equities. The House of Representatives passed the bill in July 2025.

Legal experts and industry advocates also expect the clash between federal and state regulators to escalate further if the CFTC continues threatening court action against state crackdowns on prediction markets. That dispute could eventually reach the U.S. Supreme Court, which ruled in 2018 in Murphy v. National Collegiate Athletic Association that individual states have authority to regulate sports gambling, even as Kalshi, Polymarket and the CFTC argue that event contracts on prediction market platforms are swaps subject only to federal jurisdiction.

Our earlier coverage of Senate Banking Committee hearings outlined lawmakers’ focus on supporting the U.S. economic recovery amid persistent disruptions and rising prices. The discussions highlighted small business support, improved access to capital, and growing concern that inflation is eroding consumer purchasing power and straining household budgets.

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