Tribal Gaming Opposes the Revised CLARITY Act Days Before a Senate Vote

Senator Cynthia Lummis narrowed the bill's decentralised finance provisions specifically to answer tribal worries about prediction markets. The Indian Gaming Association says that misses the point: what it wants is text saying federal commodities law does not preempt tribal gaming law, and that exchanges cannot list contracts on sports or casino games.

• Senate Banking Digital Assets Subcommittee chair Cynthia Lummis released a 630-page revised CLARITY Act on Thursday, ahead of a procedural vote on Tuesday
• If the cloture vote succeeds the Senate can debate and amend the measure; if it fails the bill is dead, with Congress breaking shortly for the November midterms
• Lummis said the revision incorporates more than 114 provisions requested by Democratic lawmakers, and narrowed its decentralised finance provisions to address tribal concerns about prediction markets
• Indian Gaming Association chairman David Bean said the changes do not address Indian Country's concerns, and that the bill "represents the largest expansion of CFTC authority since the 2010 Dodd-Frank bill"
• The association regards enactment as the greatest threat to tribal sovereignty in a generation

A Fix Aimed at Prediction Markets That Tribal Gaming Says Misses

A revised version of the CLARITY Act was released on Thursday by Senator Cynthia Lummis, the Wyoming Republican who chairs the Senate Banking Digital Assets Subcommittee, days before the procedural vote that decides whether the bill survives at all. The 630-page text also proposes changes to decentralised finance and digital-asset regulation, and Lummis said it incorporates more than 114 provisions requested by Democratic lawmakers.

The timetable is unforgiving. A cloture vote is scheduled for Tuesday. If it passes, the Senate can formally take the measure up for debate and amendment. If it fails, the bill is finished, because Congress breaks shortly afterwards for the November midterm elections. Semafor has quoted Republican senators saying the bipartisan cryptocurrency bill is likely to fail.

One of the revisions was made with gambling in mind. The new text narrows the bill's decentralised finance provisions so they apply only to certain digital commodity transactions, and Lummis confirmed the change was made to address tribal concerns about how the legislation could affect prediction markets. According to media reports, the narrowing matters to the prediction-market sector because it reduces the risk that broad DeFi language inadvertently rewrites the rules governing event contracts.

The Indian Gaming Association is not satisfied. Its chairman, David Bean, acknowledged that Lummis had recognised the concerns tribal nations raised, but said the changes released in the new text do not address them. Had the senator consulted the association before issuing the draft, he said, she would have been told that the proposed decentralised finance fix does not go far enough.

His substantive objection is about the regulator rather than the drafting. "Moreover and more importantly, the bill does nothing to rein in the [Commodity Futures Trading Commission]," Bean said. "Instead, the CLARITY Act represents the largest expansion of CFTC authority since the 2010 Dodd-Frank bill." He was particularly critical of expanding that authority at a moment when, in his words, the agency is "blatantly violating tribal and state laws, its own regulations, and the clear intent of Congress by allowing gaming to occur on Kalshi and Polymarket".

Bean set out what would change the association's position. "Until text is added to expressly provide that state and tribal gaming laws and the Indian Gaming Regulatory Act are not preempted by federal commodities law and that DCMs are not permitted to list contracts on sports betting or casino games, Indian Country will continue to urge members to vote against the CLARITY Act," he said. The association views enactment as the greatest threat to tribal sovereignty in a generation.

The Two Sides Are Not Arguing About the Same Provision

Lummis has answered a technical question: could broad DeFi language accidentally capture and rewrite event-contract regulation? Narrowing the provisions removes that risk. The Indian Gaming Association is asking a different question entirely: does the bill stop designated contract markets listing sports and casino contracts in the first place, and does it protect the Indian Gaming Regulatory Act from preemption? Nothing in a DeFi carve-out speaks to either. That is why the association's response reads as ungrateful and is not; the fix and the grievance are about different paragraphs.

Preemption Is the Whole Argument, and It Is Being Litigated in Parallel

What tribal gaming wants written into statute is exactly what the exchanges are currently asking federal courts to find in its absence. Underdog sued five states this week arguing that the CFTC's exclusive jurisdiction means state gambling law cannot reach its contracts, and pueblos and a tribe closed arguments in New Mexico seeking to bar Kalshi from sovereign land. A statutory non-preemption clause would settle that question for tribes without a single further filing, which is why its absence matters more to them than any amount of DeFi drafting.

A Bill Likely to Fail Is Still Worth Fighting Over

If Republican senators are right that cloture fails on Tuesday, none of this text becomes law and the argument resets after the midterms. It is still worth having now, because the language in a failed bill becomes the starting draft of the next one, and because Lummis has already demonstrated she will amend to address gambling concerns when they are put to her. The association's specific ask, non-preemption plus a prohibition on listing sports and casino contracts, is now on the record in a form a future drafter can lift. That is a reasonable return on a week's lobbying against a bill that may not reach a vote.

The vote on Tuesday decides the bill. It does not decide whether federal commodities law can override tribal gaming law, and that is the question Indian Country actually needs answered.