Gaming industry associations are urging Congress to pass the CLARITY Act, a bill that would explicitly ban sports betting through prediction markets. The push, directed at lawmakers on Capitol Hill, aims to close what the groups see as a regulatory loophole that lets these markets operate without the same oversight as traditional sportsbooks.
What the CLARITY Act targets
The legislation, formally known as the Commodity Futures Trading Commission Authority to Regulate Information and Trading Act, would prevent the CFTC from authorizing event contracts tied to sporting events. Gaming organizations argue that prediction markets — platforms where users bet on outcomes like game scores or player stats — are effectively sports betting and should be regulated as such.
Under current law, the CFTC has allowed some prediction markets to offer contracts on sports outcomes. The gaming groups want that stopped, saying the agency lacks the tools to monitor integrity or prevent manipulation in sports betting.
Gambling industry counters
On the other side, gambling industry groups are pressing the Senate to clarify that the CFTC does not have authority over prediction markets at all. They argue that these contracts fall under state-regulated gambling or are not gambling in the traditional sense, and that federal oversight would stifle innovation.
The two factions are fighting over a narrow but consequential question: who gets to decide what counts as a legal bet. The CFTC currently oversees derivatives markets, including some event contracts, but the CLARITY Act would strip that power for sports-related contracts. Gambling interests want the opposite — no federal role at all.
A familiar fight on Capitol Hill
This isn't the first time Congress has wrestled with prediction markets. Lawmakers have introduced bills in previous sessions to ban or restrict them, but none have passed. The current push comes as platforms like Kalshi and Polymarket have grown in popularity, drawing scrutiny from both regulators and the sports-betting industry.
The gaming groups argue that without action, these markets could bypass state gambling laws and federal prohibitions on sports betting in some jurisdictions. They say the CLARITY Act is needed to protect consumers and the integrity of sports.
The gambling industry counters that the bill goes too far, and that the CFTC should stay out of the business of regulating betting markets entirely. The outcome could reshape how Americans bet on sports — if it gets through a divided Congress.
What happens next
The CLARITY Act has been referred to House and Senate committees. No hearing has been scheduled yet. Gaming and gambling groups are lobbying key lawmakers ahead of potential markup sessions later this year. The unresolved question remains whether Congress will define the CFTC's role or punt the issue back to the states.
