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The Indian Gaming Association (IGA) announced it opposed a federal bill to regulate the cryptocurrency industry.
On the surface, the stance seems strange. But the bill gives more power to the Commodity Futures Trading Commission (CFTC). And the tribes view that as a threat in the current legal battle regarding prediction markets.
The Digital Asset Market Clarity Act would allow the CFTC to regulate certain crypto transactions. The bill is meant to create a clear rulebook for cryptocurrencies and digital assets. Additionally, the bill creates rules for decentralized finance (DeFi) applications.
Sen. Cynthia Lummis (R-WY) sponsored the bill. Lummis is the chair of the Senate Banking Electronic Assets Subcommittee and a longtime supporter of cryptocurrency regulation.
The IGA opposes a carve-out in legislation aimed at DeFi platforms, which ultimately puts more power in the hands of the CFTC.
Prediction markets are regulated by the CFTC, but state gaming regulators believe they should be regulated at the state level. Tribal gaming interests believe prediction markets infringe on their state gambling compacts.
“The bill does nothing to rein in the CFTC,” IGA Chair David Z. Bean noted. “Instead, the CLARITY Act represents the largest expansion of CFTC authority since the 2010 Dodd-Frank bill. This expansion comes at a time when the CFTC is blatantly violating tribal and state laws, its own regulations, and the clear intent of Congress by allowing gaming to occur on platforms such as Kalshi and Polymarket.”
Fear Of Perpetual Futures Markets
According to Lummis, the Clarity Act mostly legalizes additional crypto trading activities and doesn’t alter the current status of prediction markets.
Tribal gaming groups have opposed prediction market expansion as the platforms compete for gamblers in some of the country’s largest markets, such as California. The IGA views the expanding scope of the CFTC as a threat to sovereignty and tribal gaming operations.
“Until text is added to expressly provide that state, 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 County will continue to urge members to vote against the CLARITY Act and view its enactment as the greatest threat to tribal sovereignty in a generation,” Bean said.
The Clarity Act would essentially legalize perpetual futures markets, or known as “perps” to crypto traders. Perps is a simpler version of options trading. Traders are simply betting on whether a price will go up or down without owning the underlying asset.
Many in the industry argue the options wouldn’t be positioned as an entity allowing users to trade sports event contracts. However, the issue brings to light the growing opposition to prediction markets and CFTC expansion from tribal gaming groups.
Connecticut is one of the states taking aim at federal oversight of prediction markets. The Mohegan Tribe, owner and operator of one of the state’s largest casinos, supports the state’s crackdown.
Last year, tribal casinos reported $46.2 billion in gross gaming revenue. That figure represents a 5.5% year-over-year increase.
Source: <a href="https://www.cardplayer.com/poker-news/1748691-tribal-gaming-group-speaks-out-against-crypto-bill-over-prediction-market-drama” target=”_blank” rel=”nofollow noopener”>www.cardplayer.com
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