Heinrich Leads Fight to Protect State & Tribal Gaming Rights, Votes Against Advancing CLARITY Act

Heinrich to introduce an amendment to protect Indian Gaming Regulatory Act & Tribal-state compacts & prohibit CFTC-registered entities from online sports betting & casino-style gaming

WASHINGTON - U.S. Senator Martin Heinrich (D-N.M.) released the following statement after voting against advancing the Digital Asset Market Clarity Act (CLARITY Act), legislation that fails to protect state regulatory authority and Tribal gaming rights from prediction markets' unlawful online sports and casino-style gaming.

"The legislation we voted on today undermines Tribal sovereignty and states' police powers. And it directly threatens Tribes' gaming revenues, which would mean less government services funding across Indian Country. That's a lose-lose," said Heinrich. "Giving prediction markets a free pass to sidestep existing law and Tribal sovereignty is wrong, in every conceivable way. That is not to say I oppose digital asset market structure legislation. But what that legislation absolutely must include is commonsense protections for state and Tribal gaming rights, including an Indian Gaming Regulatory Act and Tribal-state compact savings clause and a ban on prediction contracts that function like sports bets or casino games."

Heinrich plans to introduce an amendment to the CLARITY Act that provides:

1. An Indian Gaming Regulatory Act (IGRA) and Tribal-state compacts savings clause; and
2. Prohibitions on Commodity Futures Trading Commission (CFTC)-registered entities from listing prediction contracts that resemble sports bets or casino-style gaming products.

The rapid expansion of sports event contracts and casino-style gaming through prediction markets threatens Tribal gaming revenues and the sovereignty of Tribal nations that rely on gaming to fund essential government services, including health care, public safety, education, housing, and social services. By offering products that function like sports bets while operating outside the regulatory framework governing gaming, prediction markets could divert a significant share of revenue away from Tribal governments.

Under the Indian Gaming Regulatory Act (IGRA) of 1988, gaming on Tribal lands is subject to a carefully negotiated framework that protects Tribal sovereignty and establishes the roles of Tribal, state, and federal governments. Following the Supreme Court's 2018 decision in Murphy v. National Collegiate Athletic Association, Tribes also began entering the legal sports betting market through agreements with states.

Prediction markets are now attempting to offer sports betting nationwide by classifying sports and event contracts as financial products rather than gambling. These markets operate under the authority of the CFTC, which has asserted jurisdiction over prediction contracts and treated them as financial derivatives rather than sports wagers.

The CLARITY Act could further entrench this loophole. By creating exemptions from federal securities regulation for certain digital asset platforms and decentralized finance infrastructure, the bill could allow prediction markets to expand sports betting and casino-style gaming nationwide without complying with the state- and Tribal-based regulatory frameworks that govern legal gaming.

Without clear protections for Tribal and state gaming rights, prediction markets could compete directly with Tribal gaming while avoiding the laws and agreements designed to protect Tribal sovereignty. Congress should ensure that digital asset market structure legislation does not create a federal pathway for companies to circumvent IGRA, Tribal-state gaming compacts, or state gaming laws.

In addition to the amendment Heinrich plans to introduce, Heinrich cosponsored another amendment to the CLARITY Act that would stop stablecoin companies from offering rewards or interest like a bank does, which could hurt local banks, reduce the money they have available to lend to families and small businesses, and increase the amount of funds in stablecoin accounts that are not insured by the Federal Deposit Insurance Corporation (FDIC). The amendment is led by U.S. Senators Jerry Moran (R-Kan.), and Jack Reed (D-R.I.).

In July, Heinrich led a letter urging the leadership of the U.S. Senate Committees on Banking, Housing, and Urban Affairs; and Agriculture, Nutrition, and Forestry to regulate prediction markets offering nationwide sports and event wagering. The letter is supported by the Indian Gaming Association (IGA), National Congress of American Indians (NCAI), Santa Ana Pueblo, Sandia Pueblo, Ohkay Owingeh Pueblo, Laguna Pueblo, San Felipe Pueblo, Kewa Pueblo, Cochiti Pueblo, Acoma Pueblo, Jemez Pueblo, Santa Clara Pueblo, Taos Pueblo, Tesuque Pueblo, Zia Pueblo, Isleta Pueblo, Pojoaque Pueblo, and Mescalero Apache Tribe.

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