In recent days, various notable developments have unfolded concerning prediction markets. Each Friday, SBC Americas summarizes significant stories often overlooked in the ‘Prediction Markets Weekly’ update.
Connecticut emerged in the spotlight this week after an aggressive attempt to regulate prediction markets led to a lawsuit from Underdog. Additionally, Kalshi faced another defeat in the Ninth Circuit, this time regarding tribal gaming issues.
Moving on to this week’s highlights:
**Senate Rejects CLARITY Act for Full Vote**
The CLARITY Act, primarily focused on cryptocurrency, garnered concerns from tribes, gaming organizations, and legislators who feared its provisions might indirectly approve prediction markets offering gaming contracts. On Tuesday, some stakeholders celebrated when the bill failed to secure the necessary votes for a full Senate vote. The tally showed a 50-49 vote against advancing the legislation, falling short by 11 votes of the 60 needed. This setback likely leaves the bill stalled until at least 2026, as Congress is set for recess following the upcoming midterm elections.
Earlier this summer, a group of twelve Democratic Senators urged key committee leaders to revise the bill, suggesting amendments to the Commodity Exchange Act that would explicitly prohibit “prediction contracts that resemble sports bets or casino-style gaming products.” The Indian Gaming Association also voiced strong opposition to the bill, arguing it could undermine the authority of tribal and state gaming authorities. Senator Catherine Cortez Masto (D-NV), who voted against the bill, commented that the current version of the CLARITY Act would enable prediction markets to facilitate illegal gaming activities disregarding state and tribal laws.
**Texas Lawmakers Discuss Regulation on Prediction Markets**
During a meeting of the Texas Senate Committee on State Affairs on Tuesday, legislators considered potential legislation or legal actions to curb sports betting in a state traditionally opposed to it. Presently, Texans can engage in sports betting through platforms like Kalshi, Polymarket, DraftKings Predictions, and FanDuel Predicts, which has raised concerns among many Texas senators.
A selection of comments from the meeting included:
– Tres York, VP of the American Gaming Association, emphasized the need for clarity, expressing, "Prediction markets think they can mess with Texas. I hope you prove them wrong and show them that everything is indeed bigger in Texas, including the consequences of violating their laws."
– Kalshi's Head of Enforcement and Legal Counsel, Robert DeNault, defended prediction markets, stating, "Prediction markets, regulated at a federal level and operated on a peer-to-peer, less predatory framework, are a safer alternative for customers."
– Senator Bob Hall described the industry as "an evil business that hurts people," equating it with other predatory practices.
As Texas lawmakers deliberate on potential actions, operators are increasingly targeting California and Texas, both of which have yet to legalize sports betting. Data indicates that these states collectively account for about 43% of the national sports prediction market volume.
**Genius Sports Launches Prediction.com**
Genius Sports is making significant strides in the prediction markets space with the launch of Prediction.com, positioned as a premier platform for comparing probabilities and event contracts. The company, already a key data provider to Kalshi and Polymarket, is using its acquired media network along with Legend, purchased for $1.2 billion this year, to enable users to track prediction market pricing across various sites.
Prediction.com currently features data from over ten prediction market operators, such as Fanatics Markets, FanDuel Predicts, Kalshi, Novig, Polymarket, and Underdog. Genius Sports aims to enhance the site’s coverage and functionalities as the prediction market ecosystem evolves. This launch follows CEO Mark Locke's recent comments highlighting the potential benefits of the event contracts industry for the company's business.
**Tunica-Biloxi Tribe Launches Prediction Markets App**
The Tunica-Biloxi Tribe of Louisiana announced that it would create the first tribal prediction markets application, partnering with Kalshi for its management and operation. The tribe is establishing a subsidiary named SaltTrade Derivatives for this initiative.
Chairman Marshall Pierite remarked that this partnership exemplifies the kind of opportunities that should be embraced by Indian Country, promoting tribal leadership and innovation. He noted, “For generations, the Tunica-Biloxi people have adapted and built relationships that allowed our Nation to prosper. This initiative carries that tradition into the modern economy and demonstrates what is possible when Tribal entrepreneurship is paired with emerging technology.”
With a population of approximately 1,600, the Tunica-Biloxi Tribe’s move contrasts sharply with two California tribes, which successfully prohibited Kalshi from operating on their reservations, reflecting the wider tribal gaming community’s opposition to prediction markets.
