US Gaming Coalition Urges Senate to Ban Sports Prediction Markets in CLARITY Act

A coalition of US gaming organisations, tribal casino operators, and casino labour unions has called on the Senate to include language in the Digital Asset Market Clarity Act that would explicitly prohibit sports and casino-style event contracts on federally registered prediction market platforms. The letter, sent to senators on 16 June 2026, was coordinated by the American Gaming Association, the Indian Gaming Association, the National Congress of American Indians, UNITE HERE, and the Culinary Workers Union Local 226.

The coalition’s core argument is jurisdictional. Sports betting has historically been governed by state and tribal regulatory frameworks, and the groups contend that the Commodity Futures Trading Commission was not built to oversee wagering activity. Platforms such as Kalshi and Polymarket have expanded their sports event contract offerings under CFTC oversight, drawing mounting opposition from regulated sportsbooks and tribal gaming operators. The American Gaming Association estimates that states have lost approximately one billion dollars in tax revenue to prediction markets since the start of 2025.

The CLARITY Act, which the Senate Banking Committee advanced on a 15-9 vote in May, is designed to assign jurisdiction over digital assets between the CFTC and the Securities and Exchange Commission. It does not directly address prediction markets, but the gaming coalition views it as the most realistic legislative vehicle for a sports-betting carve-out while the bill is under Senate consideration. A bipartisan coalition of 41 state attorneys general has separately urged the CFTC to recognise state authority over sports-related event contracts.

Compliance Implications

Prediction market platforms that operate outside state gambling licensing requirements also sit outside the KYC and AML frameworks that regulated sportsbooks must follow as the legal perimeter shifts, gaming operators and financial institutions will need verification infrastructure capable of meeting regulatory requirements at scale, regardless of jurisdiction. Shufti’s AML screening platform screens against 3,500+ global watchlists and 215+ sanctions regimes in real time.

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