Prediction Markets Spark Tribal Opposition to CLARITY Act
The Indian Gaming Association (IGA) and tribal gaming leaders are raising concerns about the Digital Asset Market Clarity Act of 2025, also known as the CLARITY Act (H.R. 3633). According to an article by Buck Wargo from CDC Gaming, tribal officials believe the bill could unintentionally open the door for expanded prediction markets that bypass existing gaming laws.
The news comes on the heels of prediction markets platform Kalshi announcing that it is now offering contracts on works of art. We’ve even seen contracts offered on the second coming.
It also happened in the wake of a group of New Mexico tribes suing Kalshi over some of its sports betting contracts.
What Is the CLARITY Act?
The CLARITY Act is designed to create a federal framework for regulating cryptocurrencies and digital assets. It aims to bring more structure to the industry by:
- Dividing oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)
- Setting rules for crypto exchanges and brokers
- Strengthening consumer protections and anti-money laundering standards
The bill has already passed the House with bipartisan support and is now under consideration in the Senate as of June 2026.
Why Tribal Gaming Groups Are Concerned
Tribal leaders argue that the bill could give more authority to the CFTC over digital commodities. This matters because prediction markets — such as Kalshi and Polymarket — fall under the CFTC’s jurisdiction.
These platforms allow users to trade on real-world outcomes, including sports events. While they are marketed as financial tools, tribal leaders say they function similarly to sports betting.
IGA Executive Director Jason Giles and other leaders warn that this setup could:
- Bypass the Indian Gaming Regulatory Act (IGRA)
- Avoid state licensing and taxation
- Operate with lower age restrictions (often 18+)
- Reduce consumer protections
In fact, just recently, someone manipulated temperature readings in France to win two large sums of money on a prediction markets app, heightening concerns.
The Risk to Tribal Revenue and Sovereignty
Tribal gaming is a major source of funding for essential services, including healthcare, education, and infrastructure. If prediction markets expand without clear limits, tribes fear losing significant revenue.
For example, reports cited by tribal leaders show prediction market wagers growing exponentially in the next year. This rapid growth raises concerns about “digital casinos” operating outside traditional regulations.
Tribal leaders also argue that the CLARITY Act could weaken state and tribal authority over gaming, especially following the 2018 Murphy v. NCAA decision, which gave states control over sports betting.
Calls for Legislative Changes
The IGA, along with the American Gaming Association, is pushing for amendments to ensure that:
- Prediction markets cannot operate as nationwide gambling platforms
- Federal law does not override tribal and state gaming authority
- Event contracts are clearly defined and restricted
In addition to lobbying efforts, tribes are pursuing legal action against prediction market platforms. Some of these cases could eventually reach the Supreme Court.
A Growing Industry Battle
At its core, this issue highlights a larger conflict between fast-moving fintech innovation and established gaming regulations. Supporters of prediction markets say they provide valuable data and hedging tools. Critics argue they are simply unregulated gambling in a new form.
Tribal leaders remain actively engaged in shaping the outcome of the CLARITY Act. With the bill still under Senate review, its final impact on the gaming industry remains uncertain.
With Senate debate still ahead, tribal leaders say the outcome could shape not only gaming policy, but also the future of state and tribal control over online wagering. They are urging lawmakers to close any loopholes before the CLARITY Act moves forward.