Gaming Coalition Tells Senate: Don't Let Prediction Markets Call Themselves Swaps 🃏

Several national gaming, tribal and labor organizations have asked the US Senate to insert language into the Digital Asset Market Clarity (CLARITY) Act that would explicitly prohibit event contracts tied to sports and casino-style gaming. A Wednesday Semafor report said the Indian Gaming Association, the American Gaming Association and other groups signed a joint letter arguing that prediction markets have driven "the largest expansion of gambling in US history over the past 18 months — without voter approval or legislative authorization." The letter calls on Congress to affirm that "sports betting falls outside the [Commodity Futures Trading Commission's] remit and cannot be offered through prediction market platforms." A separate write-up of the letter, dated 16 June 2026, added that the signatories also want clearer language blocking casino-style event contracts.

The dispute comes as the CFTC, under Chair Michael Selig, has asserted "exclusive jurisdiction" over prediction markets and backed platforms such as Kalshi and Polymarket against state-level gaming lawsuits. The gaming groups counter that "the CFTC was created to oversee commodities and derivatives markets, not gambling and not sports wagering," and that the agency "lacks both the expertise and the infrastructure to police nationwide sports betting, particularly when robust state and tribal regulatory systems already exist." The American Gaming Association reported that, as of Wednesday, state gaming authorities had lost about $1.08 billion in tax dollars "since prediction markets began offering sports event contracts." Critics also flagged that some platforms permit 18-year-old users to place wagers in jurisdictions where sports betting is otherwise illegal, a gap they attribute to federal "swaps" classification rather than state gaming law.

The CLARITY Act, which would shift portions of digital asset oversight from the Securities and Exchange Commission (SEC) to the CFTC, passed the House of Representatives in July 2025 and is now under Senate consideration. Some lawmakers expect the bill to clear Congress by August, though it has faced delays over stablecoin yield, ethics and tokenized equities. White House Chief Crypto Advisor Patrick Witt has said the administration is pushing to meet a 4 July 2026 deadline, telling reporters, "Every day, we're doing trifecta. Mornings or afternoons on Ag, ethics, and BRCA." Industry advocates and legal observers have noted that, with Selig signaling possible action against state crackdowns, the federal-state fight over prediction markets could eventually reach the US Supreme Court, a body that in its 2018 Murphy v. National Collegiate Athletic Association decision recognized state authority over sports gambling.