The Digital Asset Market Clarity Act, a much-anticipated piece of legislation designed to establish a federal framework for cryptocurrency, has failed to pass a crucial Senate vote, effectively rendering it dead for 2026. This outcome marks a significant setback for those invested in the cryptocurrency sector and has substantial implications for the gaming industry.
Requiring at least 60 affirmative votes for advancement, the bill fell short with a final count of 49-50. Four Republican senators broke party lines to oppose the bill, leaving little chance of revisiting the issue before the midterm elections in November.
Ethics concerns appeared to play a pivotal role in the rejection of this legislation. Legislators from both parties felt that an updated version of the bill released shortly before the vote did not adequately address issues related to the involvement of senior officials in crypto businesses. Despite receiving concessions from Republicans, including modifications agreed upon by former President Donald Trump that included enhanced ethics guidelines, these last-minute changes failed to win over key Senate Democrats. Arizona Senator Ruben Gallego remarked, "This legislation failed squarely because Republicans refuse to say no to the president. Instead of spending their time twisting themselves into knots to appease President Trump, Republicans should have worked more closely with Senate Democrats to craft a bill that could pass with strong ethics provisions."
Senator Cynthia Lummis of Wyoming, who led Republican negotiations, criticized her Democratic counterparts, stating they "played games" and were "never truly serious about protecting consumers." "The Democrats are now anti-American – sad!" she added.
For leaders in tribal gaming, the defeat of the Clarity Act is seen as a win in their ongoing battle against prediction markets, which have deep ties to the crypto domain. Historically, crypto markets rank as the second-largest category for prediction market trading, surpassing only sports, while numerous crypto exchanges, including Crypto.com, Coinbase, and Gemini, now facilitate predictions as well.
On June 16, a diverse coalition comprising gaming lobby groups, state associations, and labor unions sent a letter to the Senate urging lawmakers to incorporate language into the bill that would ban sports and casino-related contracts. The signatories included the American Gaming Association, the Indian Gaming Association, the Association of Gaming Equipment Manufacturers, and unions like UNITE HERE. The letter asserted, "Litigation may eventually clarify the law, but this is ultimately a question of congressional intent. Congress should not wait while this nationwide expansion of gambling continues. It should use crypto legislation to reaffirm a simple principle: sports betting falls outside the CFTC’s remit and cannot be offered through prediction market platforms."
Following the vote, IGA Chairman David Bean expressed approval of the Senate's decision, stating they "did the right thing" in not advancing the bill. He cautioned, however, that while this may mark a pause, "it is not the end of this fight."
The failure to pass the legislation is a considerable blow not just for crypto-connected prediction operators but also for the Commodity Futures Trading Commission (CFTC), which has been advocating for clearer regulation of digital assets under Chairman Michael Selig. Political action committees and interest groups invested significant resources backing the legislation.
Since assuming his role, Selig has consistently called for a federal framework for cryptocurrency. If the Clarity Act had passed, it would have granted the CFTC additional responsibilities regarding new digital assets, at a time when the agency is already managing a substantial workload. Typically, there are five commissioners, but Selig is currently the only one in office with no new nominations pending.
Selig recently chaired a meeting of the CFTC's Innovation Advisory Committee, where discussions focused heavily on cryptocurrency, featuring input from leading executives in the field. The committee's charter mandates its members to offer advice about various topics, including crypto assets.
In a post on social media, Selig previously stated that under Trump’s presidency, the U.S. indeed became the "crypto capital of the world." In the absence of a federal law, any regulations or advisories put forth by the CFTC or the Securities and Exchange Commission could be challenged in court. As of Thursday evening, Selig had not publicly commented on the Senate vote.
Beyond prediction markets, the lack of a federal framework for cryptocurrency may negatively affect the larger regulated gaming industry, particularly in sectors like iGaming and sports betting.
Younger bettors, who are increasingly comfortable with cryptocurrencies, might opt for offshore or unregulated sites that accept it, due to the slow adoption of regulations within the legal gaming industry. Executives at the ICE Barcelona conference in 2025 lamented that they are prohibited from adopting cryptocurrencies while their unregulated rivals can. A June report by Paysafe indicated that 64% of online sports bettors have engaged with crypto, in stark contrast to the 30% U.S. average. Only two states, Wyoming and Colorado, currently allow crypto deposits, and no states permit crypto withdrawals—85% of respondents in the Paysafe report expressed a desire for that option.
According to the report, "When permitted, crypto would become a top-three payment option for funding deposits, trailing only digital wallets and debit cards, and a top-two payment choice specifically in New York and Illinois."
