Casinos, tribes ask Senate to ban sports bets in Clarity Act

On June 16, a coalition of gaming associations, tribal governments and labor unions asked Senate leaders to add language to the Digital Asset Market Clarity Act that would prohibit prediction market platforms from listing sports- and casino-style contracts.

The letter was signed by the American Gaming Association, the Indian Gaming Association, the Arkansas State Chamber of Commerce, several tribes and multiple labor unions. It asks lawmakers to explicitly ban contracts tied to sporting events or casino outcomes as the Senate prepares to consider the crypto market-structure bill.

Signers contend certain prediction market platforms present sports wagers as financial products, allowing users to place bets from states where sports betting is restricted. They argued the platforms can permit participation by users as young as 18 in jurisdictions where traditional sportsbooks would bar them and lack established responsible-gaming safeguards. The groups added that marketing these contracts as investments can mislead younger users about the risks.

The letter questioned which federal agency should oversee such markets, saying the Commodity Futures Trading Commission was created to regulate commodities and derivatives, not sports wagering, and lacks the staffing and enforcement structure to police betting markets. The signers wrote, “Sports betting falls outside the CFTC’s remit and cannot be offered through prediction market platforms.” The letter also said the rapid expansion of prediction markets over the past 18 months has been the largest growth in gambling in U.S. history without voter approval or state legislative authorization.

Lawmakers face several steps before the Clarity Act reaches the Senate floor. Committees must reconcile different versions of the bill, resolve outstanding ethics questions and secure the 60 votes required to overcome procedural hurdles. Supporters of the bill have said there is momentum to pass some form of crypto market-structure legislation this year, though the schedule is compressed.

Separately, Senators Adam Schiff and John Curtis introduced a bill in March that would expressly bar sports and casino contracts on prediction market platforms. The June 16 letter echoes the language and concerns in that earlier proposal.

Industry groups backing prediction markets say the platforms offer financial hedging tools and price discovery for real-world events and have sought federal clarity to avoid a patchwork of state laws. The gaming associations, tribes and unions contend allowing sports-event contracts under a federal framework would reduce revenues that fund jobs, taxes and community programs in states and tribal jurisdictions.

If senators add a ban on sports- and casino-style contracts to the Clarity Act, the change would expand the bill’s scope beyond digital-asset trading rules to include rules on event-based wagering and which entities may offer such contracts.