Coalition of Tribes and Casinos Targets Prediction Markets in Senate Vote

More than 50 gaming associations and tribal entities sent a letter to the U.S. Senate this week, asking lawmakers to add language to the Digital Asset Market Clarity Act that would ban prediction markets from offering sports and casino-style event contracts. Labor unions joined the coalition as a separate block. The group argued the Commodity Futures Trading Commission lacks the authority and infrastructure to regulate gambling.

Polymarket and Kalshi, two platforms that operate under CFTC oversight, would face a direct hit if the coalition's language passes. The CFTC in early June moved to formalize certain sports event contracts through a rulemaking process. The coalition's letter lands in the middle of that effort, pushing the opposite direction.

The fight follows a familiar pattern. In the late 2000s, established casinos pressed regulators to crack down on digital poker platforms like PokerStars, framing opposition around consumer protection. A decade later, daily fantasy sports operators FanDuel and DraftKings faced similar opposition from traditional sports betting interests. Both fights ended with tighter rules; some platforms survived, some did not. The current push against prediction markets echoes that same dynamic, though the scale is larger.

The American Gaming Association said states have lost roughly $1 billion in tax revenue to prediction markets since 2025. Prediction market operators dispute that figure. The gap between the two sides is wide, and neither has moved.

Tribal sovereignty adds another layer. Tribal-state gaming compacts are negotiated agreements that determine who can offer gambling and where. The coalition argues that prediction markets, by operating under federal CFTC jurisdiction rather than state compacts, threaten those decades-old deals. For tribal governments that depend on gaming revenue, the concern is existential. Labor unions broaden the political appeal, tying the issue to jobs and economic stability.

Senator John Hickenlooper has publicly flagged jurisdictional concerns, saying the CFTC was never equipped to handle gambling oversight. His stance could influence other senators when the coalition's language comes to a vote. A key vote is expected within nine working days.

Watch also for a separate bill, the Schiff-Curtis amendment to the Commodity Exchange Act, which targets sports betting on CFTC-registered platforms specifically. Two legislative tracks running simultaneously put pressure on lawmakers from multiple directions. It is unclear which path gains traction first, or whether both stall.

The coalition's legal argument is narrower than it appears. They do not oppose prediction markets entirely; they argue that the CFTC lacks statutory authority over gambling. That interpretation could hold up in court even if it fails in Congress. Prediction market operators have their own legal teams working the opposite angle.

If the Clarity Act passes with the coalition's language intact, Polymarket and Kalshi would face a choice: restructure their operations or litigate the rule. If it passes without that language, the coalition has signaled it will shift to courts and state legislatures, pushing for a patchwork of restrictions. Either way, the $1 billion tax revenue dispute remains the number that moves votes.

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