Tribes Oppose Revised CLARITY Act as Senate Cloture Vote Nears

A revised version of the CLARITY Act released late last week has not moved the Indian gaming industry off its opposition, setting up a Senate procedural vote scheduled for Tuesday with tribal organizations still urging members to vote no. Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis, a Wyoming Republican, published the 630-page text on Thursday, saying it incorporated more than 114 provisions requested by Democratic lawmakers. One of those changes was written specifically to address concerns raised by tribal nations about prediction markets. Tribal leaders say it does not do the job.

David Bean, chairman of the Indian Gaming Association, said in a statement that while tribes appreciate the acknowledgment, the revised language "do not address the concerns of Indian County," and that consultation before the draft was issued would have made that clear. The association has described enactment of the bill as the greatest threat to tribal sovereignty in a generation, a framing it has held consistently since the measure first drew attention in Indian Country in the spring.

What changed in the new text

The revision narrows the bill's decentralized finance provisions so they apply only to spot and cash digital-commodity transactions. The stated purpose is to reduce the risk that broad DeFi drafting would inadvertently rewrite the regulatory treatment of event contracts, the instruments that Kalshi, Polymarket and similar venues use to offer positions on sporting outcomes.

That distinction matters to the prediction-market firms, which have argued that their sports-event contracts sit under federal commodities law rather than state or tribal gaming law. It matters much less to tribes, whose objection has never been about how DeFi is defined. The tribal complaint is jurisdictional: that a federal derivatives statute is being used to reach conduct that the Indian Gaming Regulatory Act and tribal-state compacts already govern.

Why the DeFi fix does not settle the gaming question

Bean's statement went directly to that point. "Moreover and more importantly, the bill does nothing to rein in the [Commodity Futures Trading Commission]," he said, calling the CLARITY Act the largest expansion of CFTC authority since the Dodd-Frank Act of 2010. He was also critical of extending that authority at a moment when, in his description, the commission is permitting gaming to occur on Kalshi and Polymarket in conflict with tribal and state law.

The association has set out a specific textual ask rather than a general objection. Until the bill expressly provides that state and tribal gaming laws and IGRA are not preempted by federal commodities law, and that designated contract markets may not list contracts on sports betting or casino games, the IGA says it will keep urging a no vote. That is a drafting demand, not a negotiating posture, and it is the same one tribal advocates carried into the Senate Committee on Indian Affairs roundtable in August.

The underlying exposure is not abstract. Tribal governments hold gaming exclusivity in most compacting states, and revenue-sharing payments to states are frequently conditioned on that exclusivity remaining intact. A federally chartered venue offering sports-event contracts to residents of an exclusivity state does not just compete for handle; depending on how compacts are drafted, it can trigger step-downs in what tribes owe and what states receive. That mechanism is why the dispute has drawn state attorneys general as well as tribal plaintiffs, and why it has produced a widening body of litigation rather than a single test case.

The vote math and the calendar

Tuesday's vote is procedural. If cloture succeeds, the Senate can take the measure up for debate and amendments, which would give tribal advocates a window to press for the preemption savings clause they want. If cloture fails, the bill is effectively finished for this Congress: the chamber breaks shortly for the November midterm elections, and there is little floor time left afterward.

The early read is not encouraging for the bill's sponsors. Semafor quoted Republican senators saying the bipartisan cryptocurrency measure is likely to fail this week, with Senator Mike Rounds of South Dakota offering a blunt assessment: "Does not look good right now."

For tribes, a failed cloture vote would be a reprieve rather than a resolution. The CFTC's own rulemaking on prediction markets continues on its own track, as do the lawsuits tribes have filed against platform operators in several federal districts. A dead bill removes one vehicle; it does not answer the question of whether federal commodities law can be read to reach conduct that IGRA assigns to tribal and state regulators.

It also leaves the underlying asymmetry in place. Tribal gaming is regulated through a three-tier structure of tribal, state and federal oversight built over nearly four decades. Event-contract venues operate under a single federal regulator with a different statutory purpose. Until Congress reconciles those two regimes, each new financial-services bill becomes another forum for the same argument, which is roughly what the industry's earlier assessment of the CLARITY Act predicted would happen.

What tribal organizations want from Tuesday is narrow and unlikely to be granted this week: eleven lines of savings-clause text. What they will probably get is another cycle.