Senate Fails Cloture on CLARITY Act 49-50, Stalling Prediction-Market Rules

The United States Senate on Tuesday failed to advance the CLARITY Act, voting 49-50 on a cloture motion that fell short of the 60 votes needed.

The defeat likely stalls federal rules for crypto markets and prediction markets until after the November midterms.

The bill, H.R. 3633, would establish rules for crypto markets and clarify the split responsibilities of the Securities and Exchange Commission and the Commodity Futures Trading Commission. Its official text shows a measure that began in the House and, even with Senate passage, would have returned there for final consideration.

Nevada’s two Democrats, Catherine Cortez Masto and Jacky Rosen, voted no. In a statement, Cortez Masto said the bill would allow prediction markets to continue to perpetuate illegal gaming operations that ignore state and tribal law. She also called the revised text a step backwards from the version the Senate Banking, Housing and Urban Affairs Committee passed, arguing it undermined law enforcement’s ability to investigate crypto crimes.

The Indian Gaming Association claimed the outcome. Chairman David Bean called the vote a victory for tribal sovereignty and said the Senate did the right thing by refusing to advance legislation that could have expanded CFTC commodities authority without providing the clear protections tribal nations have demanded. The association spent months lobbying Congress to reject any version of the bill that failed to protect tribal sovereignty, the Indian Gaming Regulatory Act and tribal-state compacts. One day before the vote, tribal leaders raised the same concerns at a roundtable with CFTC Chairman Michael Selig.

The Senate’s inaction leaves the fight over sports-event contracts, prediction-market wagers on sports outcomes, to the courts. Crypto.com and Robinhood have reportedly petitioned the Supreme Court to decide whether the Commodity Exchange Act preempts state gaming laws, and a recent appeals court ruling reportedly let a Nevada decision stand that allows state regulators to enforce gambling law against such contracts.

For guidance on safer play, see the site’s responsible gambling resource.