Democrats, US Gaming Industry, Seek Prediction Market Clarity
Jesse M. Cox Published 12/08/2026
The bill is called the Clarity Act, and clarity is exactly what certain factions are hoping it will deliver. A group of Democratic senators, the US gaming industry, and tribal gaming leaders are asking that the Clarity Act clarify precisely what prediction markets can offer as trades. A bipartisan bill currently before the US Senate, among the mandates of the Clarity Act, is to redefine the wording of the Commodities Exchange Act.
The aforementioned groups are requesting that Congress ensure that the bill includes language that prohibits prediction market sites from offering sports-event contracts and any form of casino-style games.
The Clarity Act could be a game changer for the American gaming industry
On the surface, the Clarity Act's main purpose is to help define regulatory rules for the burgeoning crypto industry. However, as with all bills before Congress, there are other elements to the Clarity Act.
Prediction market sites, another blossoming US industry, are also facing scrutiny from lawmakers. A group of 12 Democratic Senators wrote to the chairs and ranking members of the Committee on Banking, Housing, and Urban Affairs and the Committee on Agriculture, Nutrition, and Forestry. They are seeking that the Clarity Act ban prediction markets from offering sports-event contracts. There's another provision they want included in the bill in the rewriting the Commodities Exchange Act (CEA). It would be putting in place a prohibition on any prediction market site offering casino-style games.
The Senators argue that these measures are necessary to protect tribal gaming sovereignty and state gambling enforcement rights.
“Currently, prediction markets are misusing federal commodity and derivatives rules to offer nationwide sports and event wagering, completely ignoring state and tribal gaming licenses and regulations,” the letter reads. “These platforms claim to derive their operational authority from the Commodity Futures Trading Commission (CFTC), which has asserted its exclusive jurisdiction to oversee and regulate all prediction markets and continues to erroneously classify these products as financial swaps or derivatives rather than gambling.
“Any further Congressional grant of exclusive CFTC jurisdiction over digital asset markets without ample guardrails for prediction market contracts will reinforce the CFTC’s claimed exclusive authority over event contracts and permanently circumvent the hard-won regulatory and economic protections established under IGRA and states’ police powers.”
The gaming industry is also demanding changes
A letter co-signed by the American Gaming Association (AGA), the Indian Gaming Association (IGRA), the AFL-CIO’s Hotel and Gaming Trades Council, the hospitality industry labor union UNITE HERE, and dozens of other state, national, and tribal organizations is also seeking clarification on these prediction market issues.
"By offering nationwide sports betting through so-called “sports event contracts” and branding it as a federally regulated financial product, these platforms have bypassed state and tribal law, weakened consumer protections, and undercut a system built on local control," their letter reads.
"The CFTC was created to oversee commodities and derivatives markets, not gambling and not sports wagering. It lacks both the expertise and the infrastructure to police nationwide sports betting, particularly when robust state and tribal regulatory systems already exist.
"Congress should not wait while this nationwide expansion of gambling continues. It should use crypto legislation to reaffirm a simple principle: sports betting falls outside the CFTC’s remit and cannot be offered through prediction market platforms."
Clarity Act debate will resume next month
A cloture vote on the Clarity Act is taking place on September 15 at 2:15 p.m. ET. That's when the Senate returns from recess.
The vote would limit debate on the motion to proceed. It wouldn't approve the bill