The U.S. Senate voted 49-50 on Tuesday to reject cloture on the CLARITY Act, falling short of the 60 votes needed to advance a bill that tribal-gaming operators and lawmakers viewed as a crucial step toward prohibiting prediction-market companies from offering sports-event contracts. The procedural defeat leaves the bill likely dead for 2026, with no realistic path to reconciliation until after the November midterm elections, according to CDC Gaming.
The CLARITY Act was designed to establish rules for crypto markets and clarify the respective responsibilities of the SEC and CFTC. A revised version specified that its DeFi provisions applied only to spot and case digital-commodity transactions – a distinction that mattered to prediction markets because it reduced the risk that broad DeFi language would inadvertently rewrite regulations overseeing event contracts.
Tribal and commercial gaming operators, along with state gaming regulators, opposed that revision. The Indian Gaming Association said the legislation failed to clearly prohibit prediction-market platforms from offering sports betting and casino-style gambling through federally regulated event contracts or decentralized-finance platforms, and lacked an unequivocal statement preventing federal commodities law from preempting IGRA, tribal gaming laws, tribal-state compacts, or state gaming laws.
Cortez Masto and Bean React
Senator Catherine Cortez Masto, D-Nevada, said the bill would allow prediction markets to continue what she characterized as illegal gaming operations that ignore state and tribal law. She said the version put to a vote was a step backward from the language passed out of the Senate Banking, Housing and Urban Affairs Committee, and raised concerns that it undermined law enforcement’s ability to investigate crypto crimes and prevent illicit finance. Senator Jacky Rosen, D-Nevada, joined Cortez Masto in voting no.
David Bean, chairman of the Indian Gaming Association, described the Senate’s failure to advance H.R. 3633 as a victory for tribal sovereignty, while warning that the fight against illegal prediction markets offering sports-event contracts continues. The vote followed months of lobbying by the IGA, tribal nations, and partner organizations, and came a day after tribal organizations took part in a roundtable with CFTC Chairman Michael Selig where leaders again raised concerns about prediction-market gambling products operating outside established tribal and state regulatory systems.
Litigation Continues Regardless
Even had the Senate cleared cloture, the bill would still have needed to return to the House for consideration. The vote leaves unresolved the broader dispute over whether prediction-market contracts fall under federal derivatives rules or state gambling law, an issue now before the courts. Crypto.com and Robinhood have petitioned the U.S. Supreme Court to consider whether the Commodity Exchange Act preempts state regulation of sports-event contracts, after the Ninth Circuit affirmed a Nevada judge’s decision dissolving an approved Kalshi injunction and combined Robinhood’s and Crypto.com’s cases into its ruling. It remains unknown whether the Supreme Court will take up either petition.
The IGA said it will continue pressing for federal legislation and regulatory action that protect IGRA and tribal-state compacts from preemption, alongside meaningful government-to-government consultation with tribal nations before any federal action affecting tribal gaming rights or economies.
Source: CDC Gaming
Renata Kovacs has spent the better part of a decade following the regulatory shifts and licensing battles that define how gambling markets open, close, and evolve across Europe and beyond. She came up through the legal and compliance side of the industry before shifting her focus to journalism and analysis, giving her a perspective that sits closer to the operator room than the press box. Her coverage tends to cut through the noise and get straight to what a regulatory change actually means for the businesses and players involved.