Gaming, tribal groups seek ban on prediction-market sports bets

In a joint letter, national gaming organizations, including the Indian Gaming Association and the American Gaming Association, joined tribal and labor groups in urging the Senate to add language to the CLARITY Act that would bar sports- and casino-style event contracts on prediction market platforms.

The groups asked Congress to make clear that sports betting falls outside the Commodity Futures Trading Commission’s (CFTC) authority and cannot be offered through prediction markets.

The coalition said prediction markets have expanded wagering options over the past 18 months without voter approval or legislative authorization. “While our organizations may differ on other issues, including gambling policy, we are united in our concern that prediction markets have fueled the largest expansion of gambling in US history over the past 18 months — without voter approval or legislative authorization,” the letter wrote.

The letter added that state and tribal regulators already have systems to oversee betting and that the CFTC lacks the expertise and infrastructure to police nationwide sports wagering. “The CFTC was created to oversee commodities and derivatives markets, not gambling and not sports wagering,” the letter added.

The request follows public assertions by CFTC Chair Michael Selig that the agency has jurisdiction over prediction markets and its support for platforms Kalshi and Polymarket in legal disputes with state gaming authorities. The CFTC and those platforms classify event contracts as “swaps” subject to federal derivatives law.

The American Gaming Association estimated state gaming authorities have lost about $1.08 billion in tax revenue since prediction markets began offering sports event contracts. Several state regulators have moved to block or restrict these products, triggering lawsuits and enforcement actions.

The CLARITY Act, which would transfer some oversight of digital assets from the Securities and Exchange Commission to the CFTC, passed the House in July 2025 and is now under Senate consideration. Lawmakers have raised questions about stablecoin yield rules, ethics provisions and tokenized equities, which have delayed final action.

Legal observers note the dispute could reach the U.S. Supreme Court. The court’s 2018 decision in Murphy v. NCAA left states with authority to regulate sports gambling. Kalshi, Polymarket and the CFTC maintain that treating event contracts as swaps places them under federal jurisdiction, creating a potential federal-state legal conflict.