Senators urge regulation of prediction markets to protect tribal sovereignty
The senators propose two key amendments to the Digital Asset Market Clarity Act and the Digital Commodity Intermediaries Act.
US.- Twelve Democratic senators are calling for amendments to pending digital asset bills to address prediction markets that offer sports wagering and casino-style games. In a letter to the Senate Banking, Housing, and Urban Affairs Committee and Senate Agriculture, Nutrition, and Forestry Committee, they called for amendments to the Digital Asset Market Clarity Act and the Digital Commodity Intermediaries Act.
The letter argues that the bills in their present state would benefit prediction platforms operating unregulated betting and prediction markets. Sports and event contracts are currently treated as financial derivatives by the Commodity Futures Trading Commission. The senators claim that this circumvents state laws and the Indian Gaming Regulation Act of 1988. They claimed that the expansion of these markets jeopardises tribal revenue, which supports social services, public safety, healthcare, education, and housing.
The senators wrote: “The Digital Asset Market Clarity Act (CLARITY Act) and Digital Commodity Intermediaries Act (DCIA), as currently drafted, will only serve to exacerbate these issues by further removing regulatory accountability for decentralised finance (DeFi) betting protocols that deploy unvetted prediction and wagering markets, directly infringing on instances of Tribal gaming exclusivity and state police powers.”
Two major adjustments are requested. The first is a savings clause that safeguards tribal power under current tribe-state gaming contracts and IGRA. The second state that, with a few exceptions for decentralised financial platforms, CFTC-registered organisations would not be allowed to list contracts that mimic sports wagers or casino games.
The signees are senators Tina Smith of Minnesota, Maria Cantwell and Patty Murray of Washington, Richard Blumenthal of Connecticut, Mark Kelly of Arizona, Tammy Baldwin of Wisconsin, Alex Padilla and Adam Schiff of California, Jacky Rosen of Nevada, Brian Schatz of Hawaii and Gary Peters of Michigan joined Heinrich.
The National Congress of American Indians, the Indian Gaming Association, and seventeen tribal governments in New Mexico, including the Mescalero Apache Tribe, Santa Ana, Sandia, Isleta, Laguna, Acoma, Taos and Pojoaque pueblos, have endorsed the letter.
