Written by Turner Wrightstaff writerReviewed by Robert Lakinstaff editor

Written by Turner Wrightstaff writer

Reviewed by Robert Lakinstaff editor

Gaming groups urge Congress to ban prediction markets sports betting in CLARITY Act

Latest NewsPublishedJun 17, 2026

Gaming Groups Push for Clarity on Sports Betting

The US gaming industry is urging Congress to ban prediction markets sports betting in the Digital Asset Market Clarity (CLARITY) Act. Several national gaming and tribal organizations, along with labor groups, have requested that the US Senate add language to explicitly prohibit event contracts tied to sports and casino-style gaming. This move aims to prevent the Commodity Futures Trading Commission (CFTC) from overseeing prediction markets, which they believe has led to a massive expansion of gambling without voter approval or legislative authorization.

The CFTC, under Chair Michael Selig, claims to have exclusive jurisdiction over prediction markets, supporting platforms like Kalshi and Polymarket against state-level gaming authorities. However, gaming groups argue that the CFTC lacks the expertise and infrastructure to regulate sports wagering, and that state and tribal regulatory systems already exist to handle this. The American Gaming Association reports that state gaming authorities have lost around $1.08 billion in tax dollars since prediction markets began offering sports event contracts.

Regulatory Dispute

The dispute between federal and state regulators may eventually be heard by the US Supreme Court. The court previously gave individual states the authority to regulate sports gambling in its 2018 decision in Murphy v. National Collegiate Athletic Association. Nevertheless, the CFTC and prediction market platforms argue that event contracts are swaps subject only to the agency’s jurisdiction. As the CLARITY Act aims to transfer some regulatory authority from the Securities and Exchange Commission (SEC) to the CFTC, lawmakers expect it to be passed by August.

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Source: Semafor

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“The CFTC was created to oversee commodities and derivatives markets, not gambling and not sports wagering,” said the letter. “It 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.”

Related: Kalshi adds software partner as it looks to boost prediction market surveillance

Some lawmakers expect the CLARITY Act, aimed at transferring some of the authority in regulation and enforcement of digital assets from the Securities and Exchange Commission (SEC) to the CFTC, to be passed out of Congress by August. The bill passed the House of Representatives in July 2025, but has faced delays due to concerns over stablecoin yield, ethics and tokenized equities.

Legal fight could land in US Supreme Court

Some experts and industry advocates anticipate that with Selig and the CFTC threatening to take any state-level authorities to court over crackdowns on prediction markets, the dispute between federal and state regulators could eventually be heard by the US Supreme Court.

The country’s highest court gave individual states the authority to regulate sports gambling in its 2018 decision in Murphy v. National Collegiate Athletic Association. However, Kalshi, Polymarket and the CFTC have largely argued that event contracts on prediction market platforms are “swaps” only subject to the agency’s jurisdiction.

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• Games
• CFTC
• Congress
• Law
• Prediction Markets
• Regulation

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