A revised version of the CLARITY Act has been released just days before a crucial Senate vote, with significant changes covering prediction markets, a move that tribal nations believe is a threat to their sovereignty.
Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis released the 630-page revised measure on Thursday ahead of a procedural Senate vote on Tuesday. If the cloture vote succeeds, the Senate can formally take up the measure for debate and amendments, but if it fails, the bill is dead as Congress will break shortly for the midterm elections in November.
The revised bill also proposed changes to decentralized finance (DeFi) and digital-asset regulation. Lummis, a Republican from Wyoming, said the latest version incorporated more than 114 provisions requested by Democratic lawmakers.
David Bain, chairman of the Indian Gaming Association, made it clear that Indian Country is opposed to the new version of the CLARITY Act.
“While we appreciate Senator Lummis has acknowledged the legitimate concerns raised by tribal nations, the proposed changes in the text released yesterday do not address the concerns of Indian County,” Bain said in a statement.
Bain explained that if the senator had consulted with the IGA before issuing the latest draft, she would have been told the proposed decentralized finance “fix” does not sufficiently address its concerns.
The revision, opposed by tribal gaming operators and regulators, specifies the bill’s DeFI provisions apply only to spot and case digital commodity transactions. Lummis confirmed the change was made to address tribal concerns over how the legislation could affect prediction markets.
According to media reports, the distinction was important to prediction markets because it reduces the risk that broad DeFi language inadvertently rewrites regulations oversee event contracts.
“Moreover, and more importantly, the bill does nothing to rein in the (Commodity Futures Trading Commission),” Bain said. “Instead, the CLARITY Act represents the largest expansion of CFTC authority since the 2010 Dodd-Frank bill.”
Bain also was critical of the expansion of the CTFC’s authority especially at a time when the federal agency “blatantly violating tribal and state laws, its own regulations, and the clear intent of Congress by allowing gaming to occur on Kalshi and Polymarket.”
“Until text is added to expressly provide that state, tribal gaming laws and the Indian Gaming Regulatory Act, are not preempted by federal commodities law, and that DCMs are not permitted to list contracts on sports betting or casino games, Indian Country will continue to urge members to vote against the CLARITY Act,” Bain said.
Bain added that the IGA views its enactment as the greatest threat to tribal sovereignty in a generation.
Semafor quoted Republican senators saying the Senate bipartisan cryptocurrency bill is likely to fail next week.
“Does not look good right now,” Senator Mike Rounds, a Republican from South Dakota, told Semafor.
