A coalition of over 50 gaming associations, tribal governments, and labour unions has called upon the US Senate to revise the CLARITY Act, seeking to explicitly prohibit sports and casino-style event contracts on prediction-market platforms. This escalation marks a significant battle over the regulatory landscape of betting in America.
On June 16, the coalition submitted a letter advocating for amendments aimed at ensuring that sports betting remains outside the jurisdiction of the Commodity Futures Trading Commission (CFTC). Prominent signatories include the American Gaming Association, the Indian Gaming Association, and UNITE HERE, which represents around 300,000 workers in the hotel, gaming, and food service sectors across the United States and Canada.
### A Regulatory Dispute
Central to this controversy is whether the CFTC should have any oversight over sports wagering. The coalition argues that the CFTC “structurally lacks the authority and institutional infrastructure” required to effectively regulate sports betting on a national scale. They emphasize that a robust framework already exists through state and tribal systems that manage these activities.
The coalition is particularly concerned about potential implications for tribal governments, warning that without specific provisions in the CLARITY Act, federal regulation could inadvertently legitimise widespread sports betting via CFTC-registered platforms. This could undermine the current tribal-state compact system, which defines where betting is permitted and how revenues are distributed.
### Contested Financial Figures and an Expanding Debate
The coalition asserts that prediction markets have triggered the most significant expansion of gambling in US history within the last 18 months, bypassing necessary voter approval, legislative backing, and meaningful consumer protection measures. They claim that states have lost an estimated US$1 billion (AU$1.42 billion) in tax revenue as a direct result of these contracts, a figure that prediction-market operators contest vigorously.
This push for regulatory clarity comes in the wake of the CFTC, under Chairman Michael Selig, advancing a comprehensive 267-page proposal. This proposal would authorise contracts related to sports events, including final scores, point differentials, win-loss results, and player statistics, similar to offerings by prediction platforms such as Kalshi and Polymarket.
Furthermore, this movement coincides with the introduction of the Prediction Markets Are Gambling Act by Senators Adam Schiff and John Curtis, aimed at prohibiting CFTC-registered entities from listing sports or casino-style contracts.
The ongoing discussions and proposed legislation signify a critical juncture in the struggle for authority over sports betting in the US, with various stakeholders advocating for their position amid a rapidly evolving landscape.
