U.S. Senator Martin Heinrich (D-N.M.) sent a letter to two U.S. Senate Committees urging tighter controls on prediction markets.
Key Takeaways
- New Mexico currently has several lawsuits challenging the legality of prediction markets.
- Two bills being considered in the U.S. Senate could make it harder for states to ban or regulate prediction markets.
- Heinrich, along with 10 other senators and 16 tribal jurisdictions, sent a letter warning two Senate Committees of the repercussions.
Senator Martin Heinrich of New Mexico sent a letter to the U.S. Senate Committee on Banking, Housing, and Urban Affairs and the U.S. Committee on Agriculture, Nutrition, and Forestry. Both committees are currently evaluating two bills that would potentially change the legal landscape for cryptocurrency and prediction markets.
The Digital Asset Market Clarity Act (CLARITY Act) and Digital Commodity Intermediaries Act (DCIA), as drafted, would serve to loosen prediction markets regulation, taking a bigger toll on state and tribal regulated sports betting and casino games.
Enjoying Covers content? Add us as a preferred source on your Google accountHeinrich’s letter stated, “prediction markets are misusing federal commodity and derivatives rules to offer nationwide sports and event wagering, completely ignoring state and tribal gaming licenses and regulations.” The two bills would only exacerbate the problem and would “effectively allow prediction markets to offer online casino-style gaming and sports betting across the United States, entirely bypassing the localized tribal-state regulatory systems required by the Indian Gaming Regulatory Act (IGRA).”
New Mexico and prediction markets square off court
New Mexico is grappling with the rapid expansion of prediction markets. In May, four New Mexico tribes sued Kalshi, alleging the prediction market operator was offering illegal sports betting across tribal jurisdictions.
In June, the New Mexico Attorney General sued Kalshi, claiming it was illegally offering gambling, outside the state’s tribal-state gaming compacts or state-regulated licensing.
Just weeks after New Mexico filed its suit, Kalshi’s regulator, the Commodity Futures Trading Commission (CFTC), countersued New Mexico. The CFTC is claiming the state and tribes have no jurisdiction over federally related prediction markets.
Meanwhile, New Mexico State Representative John Block is urging the state to renegotiate the state gambling compact to legalize online sports betting. Currently, New Mexico only allows in-person sports betting. Block argues New Mexico is losing tax revenue to unregulated online gambling and prediction market operators already accessible in the state.
New Mexico is hardly the only state to have issues with the spread of prediction markets. The prediction markets news is rife with states battling the nascent sector, which offers sports-related contracts that mimic sportsbooks. That might explain why so many other U.S. Senators signed onto Heinrich’s letter.
The letter was also signed by U.S. Senators Tina Smith (D-Minn.), Maria Cantwell (D-Wash.), Richard Blumenthal (D-Conn.), Mark Kelly (D-Ariz.), Patty Murray (D-Wash.), Tammy Baldwin (D-Wis.), Alex Padilla (D-Calif.), Jacky Rosen (D-Nev.), Adam Schiff (D-Calif.), Brian Schatz (D-Hawaii), and Gary Peters (D-Mich.).
It was also supported by the Indian Gaming Association (IGA), National Congress of American Indians (NCAI), Santa Ana Pueblo, Sandia Pueblo, Ohkay Owingeh Pueblo, Laguna Pueblo, San Felipe Pueblo, Kewa Pueblo, Cochiti Pueblo, Acoma Pueblo, Jemez Pueblo, Santa Clara Pueblo, Taos Pueblo, Tesuque Pueblo, Zia Pueblo, Isleta Pueblo, Pojoaque Pueblo, and Mescalero Apache Tribe.
