Tribal regulators and senators push prediction markets limits in Clarity Act
Tribal gaming regulators and senators urged Congress during an August 2026 Senate roundtable to add prediction markets limits to the Clarity Act. The provision would preserve state and tribal authority over sports betting rather than allow federal regulators to oversee the space. Tribal leaders warned that prediction markets threaten tribal gaming revenues. The push centers on pending federal legislation aimed at clarifying jurisdiction over emerging gaming products.
The tribal provision would hand state and tribal regulators a statutory veto over sports event contracts that Kalshi and Polymarket now list under CFTC registration. That guts the federal preemption shield both platforms have used to defend against state gambling suits in Utah, New York, Michigan, and Wisconsin. A Clarity Act carveout would validate those state court rejections of preemption and invite more attorneys general to act.
Kalshi already faces contradictory commands: Michigan courts demand it halt trading while the CFTC orders continuation. Tribal backing for state jurisdiction hardens the political wall against a single federal standard. The Second Circuit appeal is the platforms' last bet on restoring that standard, but congressional action could moot it before the court rules.
Tribal gaming regulators join the NFL and the Schiff-Curtis congressional camp in seeking to limit federally regulated sports event contracts, adding tribal sovereignty to the coalition pressing against the CFTC's Rule 40.11 framework.