The California Nations Indian Gaming Association (CNIGA) has urged Senate leaders not to bring up the CLARITY Act on Tuesday, unless it closes the prediction market loophole and preserves federal, state, and tribal gaming law.
In a letter to Senate Majority Leader John Thune, R-South Dakota, and Minority Leader Chuck Schumer, D-New York, CNIGA Chairman James Siva warned that prediction market operators are attempting to use federal commodities law to offer nationwide gambling.
Siva said these companies are bypassing the regulatory framework Congress established through the Indian Gaming Regulatory Act (IGRA) and longstanding tribal and state laws.
“Congress built a carefully negotiated federal, state, and tribal framework for gaming,” Siva said. “Prediction market companies want none of that. But just because you’re well-funded doesn’t mean the rules don’t apply.”
CNIGA has called on Senate leadership to ensure that any digital-asset market-structure legislation prohibits designated commodity markets from listing event contracts involving sports wagering, athletic competitions, player performance, casino-style gaming, or other activities regulated under federal, state, or tribal gaming law.
The Sacramento-based association also called for preserving IGRA, tribal-state compacts, and state and tribal gaming laws and preventing digital-asset and decentralized-finance provisions from being used as a backdoor for nationwide mobile gambling.
As CDC Gaming reported last week, the Senate has scheduled a cloture vote on the 630-page CLARITY Act for Tuesday. The procedural vote requires 60 votes to overcome a filibuster and move forward with formal floor debate.
Republicans hold 53 seats in the Senate, meaning the amended 630-page bill needs bipartisan support from Democrats or independents to cross the 60-vote threshold.
The controversial legislation would establish a new regulatory framework for cryptocurrencies and other digital assets. The bill cleared the Senate Banking Committee in May, but stalled as Senate leaders struggled to find the 60 votes needed.
Senator Cynthia Lummis, R-Wyoming, chair of the Senate Banking Electronic Assets Subcommittee, released a revised version of the legislation on Thursday.
The biggest concern for tribes is that the revised measure doesn’t address the potential expansion of the Commodity Futures Exchange Commission. The bill expands the federal regulator’s authority without establishing clear boundaries on tribal and state gaming laws.
“This issue cannot be left to regulators, future litigation, or ambiguous statutory language,” Siva wrote. “Prediction market companies are already moving aggressively to use federal commodities law to offer sports wagering nationwide, while avoiding the laws that have governed gaming for decades.”
Siva wrote, put simply, sports-event contracts are sports betting.
“Calling them ‘prediction markets’ or ‘event contracts’ doesn’t change what they are in practice,” he added.
Siva sympathized with commercial gaming operators and regulators in their efforts to block prediction markets, but reminded Thune and Schumer that tribal gaming is different.
“It is a core expression of self-governance and the critical sources of funding for the health care, education, housing, public safety, infrastructure, elder services, cultural preservation, and other essential government services promised in exchange for the lands we lost,” Siva wrote.
Without gaming, Siva said, many tribal nations would lack the resources to support their people and once again become dependent on federal resources.
