- Twelve Democratic senators are asking the chamber’s banking and agriculture panels to build state and tribal gaming protections into two pending cryptocurrency bills.
- Their target is the CLARITY Act and the Digital Commodity Intermediaries Act, both moving through Senate negotiations.
- They want two things: wording that shields existing Indian gaming law, and a bar on CFTC-regulated contracts that copy sportsbook wagers.
- One day later, a House subcommittee grilled the same sports contracts and divided over whether they count as derivatives or as betting.
WASHINGTON – Twelve Senate Democrats, with New Mexico’s Sen. Martin Heinrich out front, told a pair of Senate committees Monday to rewrite pending crypto legislation before it lets federally overseen prediction markets run sportsbook and casino-style wagering that slips past state gaming rules and tribal authority.
The Senators’ Request
Heinrich and eleven of his colleagues addressed their appeal to the heads of two committees, Banking, Housing, and Urban Affairs and Agriculture, Nutrition, and Forestry, the panels currently hashing out the Digital Asset Market Clarity Act and the Digital Commodity Intermediaries Act.
Each measure sets aside an exemption for decentralized-finance operators, and the lawmakers caution that the loophole would let betting platforms book contracts on sports and other events as commodity derivatives instead of as gambling. That reclassification, they say, would let the platforms skip the fee and revenue-sharing arrangements that tribes secured through the Indian Gaming Regulatory Act of 1988.
In their letter, the senators describe the platforms as an “existential threat to tribal sovereignty,” warning that they drain the money tribal governments count on to run basic services. The group requested two additions to the bills. The first is a carve-out that keeps the Indian Gaming Regulatory Act and current tribal-state compacts intact. The second would forbid firms registered with the Commodity Futures Trading Commission from offering any contract built to mimic a casino game or a sports wager.
Signing alongside Heinrich were Sens. Mark Kelly, Brian Schatz, Tina Smith, Gary Peters, Jacky Rosen, Tammy Baldwin, Maria Cantwell, Adam Schiff, Patty Murray, Richard Blumenthal and Alex Padilla. Support for the effort came from more than a dozen New Mexico pueblos and tribes, along with the National Congress of American Indians and the Indian Gaming Association.
These same venues have faced questions on the political side of their business, where names like Polymarket and Kalshi sell contracts tied to who wins elections.
The House Takes Up the Question
The next day, attention shifted to the House, where the Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development convened its first hearing on sports prediction markets. The session, “Examining Customer Protections and Market Integrity in Sports Event Prediction Markets,” drew five witnesses who could not agree on a basic point: whether these sports contracts are legitimate derivatives or gambling dressed up as finance. Members wanted to know whether a federal permit would come with the age checks and self-exclusion options that sportsbooks licensed by states are required to offer.
The panel’s chairman, Rep. Dusty Johnson of South Dakota, suggested the courts or the CFTC might eventually decide whether the products are legal, but he argued that lawmakers should weigh in rather than wait. Speaking for tribal gaming, Indian Gaming Association Chairman David Z. Bean told the panel the contracts are engineered to slip past both state and tribal rules. The subcommittee had flagged the House hearing on prediction markets roughly a week before it happened, and the testimony ended without agreement.
The New Mexico Stakes
Nowhere is the tension clearer than in Heinrich’s own state. In New Mexico, placing a legal sports bet means doing it on tribal land under a compact signed with the state, yet prediction markets regulated by the CFTC take action everywhere in the state, on sports results and on the election odds that made them famous. According to the senators, those operators pay nothing into public coffers and sit outside every consumer safeguard that state and tribal books have to honor.
The senators want their two fixes added to each bill before either moves forward. So far, neither has been put on the calendar for a markup.
