A 50-plus group coalition including the AGA, tribal operators, and labor unions asked the Senate to amend the CLARITY Act to ban sports event contracts from CFTC-regulated prediction markets.
On June 16, 2026, a coalition of more than 50 gaming associations, tribal governments, labor unions, and state regulatory agencies sent a letter to the U.S. Senate demanding that the Digital Asset Market Clarity Act (the CLARITY Act, H.R.3633) be amended to bar CFTC-registered prediction market platforms from listing sports event contracts and casino-style products.
The signatories include the American Gaming Association (AGA), the Indian Gaming Association (IGA), the Association of Gaming Equipment Manufacturers (AGEM), the AFL-CIO's Hotel and Gaming Trades Council, workers' union UNITE HERE, the National Thoroughbred Racing Association, and roughly two dozen state gaming regulatory agencies. It is the largest coordinated lobbying action against prediction markets since Kalshi and Polymarket US began offering sports event contracts at scale.
The CLARITY Act passed the Senate Banking Committee with bipartisan support and was placed on the Senate floor calendar in spring 2026. The coalition's letter asks senators to add explicit statutory language making clear that sports wagering falls outside the CFTC's remit and cannot be offered through a CFTC-registered designated contract market. The request covers two categories: contracts on sporting events and contracts on casino-style games such as slots, poker, and blackjack.
A parallel bill, the Prediction Markets Are Gambling Act (S.4160), introduced in March 2026 by Senators Adam Schiff and John Curtis, would amend the Commodity Exchange Act directly to achieve the same outcome. The coalition's June 16 letter targets the CLARITY Act because it is further along the Senate calendar and has broader bipartisan co-sponsorship.
The CFTC's own June 10 proposed rulemaking establishes a three-part public interest test for event contracts but does not propose banning sports contracts as a category. The CFTC NPRM and the CLARITY Act amendment request are two separate processes running in parallel. Congress can add the sports ban to the CLARITY Act whether or not the CFTC finalizes its NPRM, and the CFTC can finalize its rule whether or not the CLARITY Act passes. See the CFTC prediction market rules 2026 guide for the full three-part test and which contracts it targets.
The AGA's primary argument is fiscal: state gaming authorities have lost approximately $1 billion in tax revenue to prediction markets since the start of 2025. That revenue would have been generated by sports wagers placed at state-licensed operators.
Sports event contracts represent a large share of prediction market volume. In a 2025 sample period cited in Kentucky's AG court filing, sports contracts accounted for roughly 70% of Kalshi's notional trading activity. Kalshi's monthly notional volume currently exceeds $4.7 billion. At that 70% share, the sports-contract slice runs approximately $3.3 billion per month on Kalshi alone.
| Platform | Monthly Notional Volume (June 2026) | Sports Contract Share | Estimated Sports Volume |
|---|---|---|---|
| Kalshi | ~$4.7B | ~70% (2025 sample, KY AG filing) | ~$3.3B |
| Polymarket US | ~$3.7B | Not publicly disclosed | N/A |
For context, DraftKings and FanDuel operate their event contracts through CME Group's designated contract markets and hold state gaming licenses in many jurisdictions. The coalition's letter would not affect their products. Only CFTC-registered prediction markets operating without state gaming licenses are in scope.
Run any sports-market trade through the prediction market fee calculator to understand your current fee exposure on these contracts before any legislative changes take effect.
If the CLARITY Act passes with the gaming coalition's language, every CFTC-registered prediction market platform (Kalshi, ForecastEx, Polymarket US) loses the right to list sports event contracts. No new sports markets open. Existing contracts run to settlement or are closed per each platform's procedures.
The downstream effects on the math are concrete.
Cross-platform arbitrage on sports collapses. Today, arb windows exist between Kalshi sports markets and sportsbook odds because they price the same outcome from different starting assumptions. Remove Kalshi's sports markets and those legs disappear. The cross-platform arbitrage guide covers the full mechanics; run any active setup through the arbitrage calculator now to know the current fee-adjusted return before the legislative picture clarifies.
Non-sports liquidity narrows. Sports contracts represent roughly 70% of Kalshi's order flow. If that volume leaves, the capital supporting political, economic, and climate markets on the same platform narrows too. Thinner order books mean wider spreads and more slippage on larger position sizes. A position that works at $2,000 in size today may not work at the same size six months from now if the order book depth contracts.
Offshore Polymarket is unaffected. The original Polymarket (non-U.S.) is not a CFTC-registered designated contract market and sits outside any proposed U.S. sports ban. Polymarket US, which is CFTC-regulated, is within scope. Traders using the offshore version face different legal and tax treatment regardless of what Congress does. See event contract tax treatment for the reporting differences.
As of late June 2026, Polymarket traders price the CLARITY Act's passage in 2026 at approximately 48% to 55%, down from 74% a month ago. The gaming coalition's amendment demand complicates the bill's path: prediction market platforms supported the CLARITY Act when it primarily addressed crypto market structure, but a sports-contract ban provision turns the bill into a direct threat to their core product line. Platform opposition to an amended bill reduces the lobbying weight on the pro-passage side.
The Senate floor vote is not scheduled. The CFTC comment window closes July 27, 2026. No existing sports contracts on Kalshi or Polymarket US are affected today. The risk is legislative and forward-looking, with a timeline that remains uncertain past the summer.