Gaming Groups Call for CLARITY Act Changes to Address Prediction Market Platforms
Major US gaming associations have taken coordinated action in July 2026 by sending a joint letter to Senate leadership that requests specific amendments to the CLARITY Act, a bill focused on cryptocurrency regulation. The American Gaming Association, Indian Gaming Association, and Association of Gaming Equipment Manufacturers signed the document, which asks lawmakers to add language that would prohibit sports and casino-style prediction markets on platforms including Polymarket and Kalshi.Details of the Joint Request
The letter argues that these platforms operate as unregulated gambling services that sidestep existing state licensing requirements, tribal gaming compacts, consumer protection standards, and tax obligations. Observers note that the associations frame the issue as the largest expansion of gambling activity in the United States without explicit legislative authorization, and they point to the absence of oversight mechanisms that apply to licensed operators in most jurisdictions.
The groups emphasize that prediction market contracts tied to sports outcomes and casino-style events function similarly to traditional wagers yet fall outside the regulatory framework that governs legal betting markets. Data from the associations indicates that these offerings have grown rapidly in recent years, drawing participants who would otherwise engage through state-regulated channels that collect taxes and enforce age restrictions.Regulatory Concerns Highlighted
According to the letter, the Commodity Futures Trading Commission currently oversees certain prediction market activities, yet the associations contend that the agency lacks specialized expertise in sports betting regulation. They request that any final version of the CLARITY Act explicitly classify sports-related and casino-style contracts as outside the CFTC's jurisdiction, thereby directing such activity toward established state and tribal regulatory systems.
Youth access stands out as a primary issue raised in the document. The associations reference the platforms' current verification processes and note that these measures fall short of the standards required for licensed gambling operators in most states. They also cite insufficient responsible gambling tools, such as self-exclusion programs and spending limits, as additional gaps that could expose users to higher risks compared with regulated environments.Context Within Broader Legislation
The CLARITY Act aims to establish clearer rules for digital asset markets, and the gaming associations have asked that provisions addressing event contracts be included during the amendment process. Lawmakers have not yet scheduled a vote on the bill, and staff members in both chambers continue to review stakeholder input as of mid-July 2026.
The joint letter references earlier regulatory actions and state-level enforcement efforts that have targeted similar platforms. It connects these developments to the argument that federal legislation should prevent prediction markets from creating a parallel gambling system that operates without the same accountability requirements placed on traditional operators.
Industry Impact and Stakeholder Positions
Representatives from the signing associations have stated that the requested changes would preserve the integrity of existing regulatory compacts between states and tribal nations. They point out that licensed operators already contribute substantial tax revenue and maintain consumer safeguards that prediction market platforms have not adopted at scale.
The letter further notes that bypassing these structures could shift economic activity away from jurisdictions that rely on gaming revenue for public programs. Figures cited in the document show that state-regulated sports betting markets generated billions in taxable handle during the 2025 calendar year, underscoring the scale of the market that the associations seek to protect through legislative clarification.Next Steps in the Legislative Process
Senate committees reviewing the CLARITY Act have received the joint letter and are expected to consider the proposed language during markup sessions scheduled for later in July 2026. House members have also received copies, although the primary focus remains on the Senate version of the bill at this stage.
The associations have indicated they will continue to engage with lawmakers and provide additional data on consumer protection gaps as the legislative calendar advances. No formal response from Senate leadership has been issued yet, and the outcome will depend on negotiations that incorporate input from multiple industry sectors.Conclusion
The coordinated effort by major gaming associations marks a direct attempt to shape federal cryptocurrency legislation in ways that affect event contract markets. Their request centers on closing perceived regulatory loopholes while directing sports and casino-style activity toward existing oversight systems that include taxation, age verification, and consumer protections. As the CLARITY Act moves through the Senate, the specific amendments proposed in the joint letter will likely influence ongoing debates about how prediction markets fit within the broader US gambling regulatory landscape.