Share 
State of Play’s TL;DR
- A group of Senate Democrats wants pending crypto legislation rewritten so prediction markets cannot offer sports-bet or casino-style contracts in ways that undercut tribal gaming rights, state law, and existing compacts.
- The push turns a crypto policy debate into a gambling policy fight with national stakes.
US Sen. Martin Heinrich led a July 17 letter signed by 12 Senate Democrats and sent to the chairs and ranking members of the Senate Banking and Agriculture committees. The lawmakers are targeting the Digital Asset Market Clarity Act and the Digital Commodity Intermediaries Act.
Their concern is that exemptions for decentralized finance platforms could let prediction markets classify sports and event wagers as financial derivatives instead of gambling. According to the letter, that could allow those markets to bypass licensing and revenue-sharing requirements under the Indian Gaming Regulatory Act, the 1988 federal law that governs tribal gaming.
The senators asked for two main changes: a savings clause preserving IGRA and existing tribal-state gaming compacts, and a ban on Commodity Futures Trading Commission-registered entities listing contracts that mirror sports bets or casino games. An addendum includes draft language that would also clarify the crypto bills do not pre-empt IGRA, the Wire Act, or state and tribal gaming law.
Letter points to importance of gaming revenue for tribes
This is a federal attempt to draw a line between regulated gaming and prediction market products that look and act like gambling.
If lawmakers do not add the requested protections, the senators argue prediction markets could use federal crypto exemptions to offer sports and casino-style wagering nationwide under a different regulatory label. That would raise obvious concerns for tribal operators and state-regulated markets, which typically work under licensing systems, compact terms, and revenue-sharing rules that prediction platforms may not face in the same way.
The letter frames tribal gaming revenue as a funding source for health care, housing, public safety, and education, and cites federal data showing reservation household income has risen sharply since 1990 while reservation child poverty fell from more than 47% in 1989 to 27% by 2018.
The effort is backed by the Indian Gaming Association, the National Congress of American Indians, and 17 tribes and pueblos, including Santa Ana, Sandia, Zia, San Felipe, Jemez, and Cochiti.
Based on reporting by Kevin Hendricks for New Mexico Political Report.
