President Donald Trump has renewed pressure on Congress to approve sweeping digital asset legislation, but the bill’s path through the Senate remains uncertain as disputes over crypto regulation become increasingly intertwined with the legal battle surrounding prediction markets.
Trump urged lawmakers on 19 August to advance the Digital Asset Market Clarity Act during a White House meeting attended by Commodity Futures Trading Commission Chairman Michael Selig and senior cryptocurrency industry figures. The legislation is designed to establish clearer boundaries between securities and commodities regulation for digital assets and expand the federal framework governing the sector.
The House-approved measure has stalled in the Senate ahead of a key procedural vote scheduled for 15 September. Senate records show that cloture has been filed on a motion to proceed with the bill, meaning supporters will need enough votes to overcome the procedural hurdle before lawmakers can move toward substantive debate.
Amanda Fischer, policy director and chief operating officer at financial reform organisation Better Markets and a former Securities and Exchange Commission chief of staff, believes the legislation may struggle to reach the required Senate threshold. She pointed to unresolved disagreements involving presidential crypto interests, law-enforcement concerns around decentralised markets, objections from community banks and broader tensions between established financial institutions and the digital asset sector.
Prediction markets become part of wider crypto dispute
The debate extends well beyond cryptocurrency classification. Fischer argued that lawmakers considering whether to expand the CFTC’s authority are also paying close attention to the agency’s increasingly aggressive stance in disputes involving prediction markets.
Under Selig, the CFTC has maintained that federally regulated event-contract exchanges fall under its exclusive jurisdiction. The regulator has repeatedly challenged states seeking to apply local gambling laws to platforms offering sports and other event contracts.
That conflict intensified during 2026. In April, the CFTC sued Wisconsin after the state brought cases against Kalshi, Polymarket, Crypto.com, Robinhood and Coinbase, alleging violations of state gambling law. The federal regulator has also taken legal action against New York, Connecticut, Illinois, Arizona and other jurisdictions as it seeks to establish federal supremacy over regulated prediction markets.
A similar dispute emerged in New Mexico in June. After state authorities accused Kalshi of operating unlawful online sports betting, the CFTC filed its own federal lawsuit seeking a declaration that the Commodity Exchange Act gives the commission exclusive authority over event contracts listed by registered markets.
States and tribal gaming interests have pushed back, arguing that sports-related prediction contracts can function like gambling products and therefore interfere with state gaming regimes and tribal sovereignty.
Fischer expects those challenges to remain a major legal obstacle for prediction platforms. Her assessment is that states and tribes ultimately have a strong chance of prevailing once the various cases move further through the courts.
CFTC moves ahead with new event-contract rules
At the same time, the CFTC is attempting to modernise its own regulatory framework.
The commission withdrew a previous event-contract proposal in February and launched a new rulemaking process in March. In June, it proposed amendments to Regulation 40.11 covering contracts tied to activities including gaming, war, terrorism and assassination. The framework would establish a formal process for deciding whether particular contracts fall within categories identified by the Commodity Exchange Act and whether they should be prohibited as contrary to the public interest.
The proposal follows rapid expansion across the prediction market sector. CFTC data shows registered markets certified roughly 1,600 new event contracts in 2025, compared with an average of around five per year between 2006 and 2020.
Selig has presented the new rules as an attempt to create a clearer and more predictable regulatory system while protecting federally regulated markets from conflicting state requirements. Fischer, however, believes the process could itself become vulnerable to litigation if opponents argue that the CFTC exceeded its statutory authority or failed to adequately justify its regulatory approach.
That creates another potential front in a dispute already being fought simultaneously in federal courts, state enforcement actions and Congress.
September vote could shape the next phase
Trump has made digital asset legislation part of his broader effort to position the US as a leading jurisdiction for crypto businesses. The administration has also used the SEC and CFTC to advance more industry-friendly policies while Congress struggles to reach agreement on permanent legislation.
The Clarity Act nevertheless faces political obstacles beyond prediction markets. Lawmakers have raised concerns about Trump’s own cryptocurrency interests, while parts of the traditional banking sector have opposed provisions that could allow crypto businesses to compete more directly for customer deposits and investment activity.
The Senate’s procedural vote on 15 September will therefore be an important test of whether the administration can convert its regulatory agenda into legislation.
Even if the bill advances, the prediction market conflict is unlikely to disappear. The CFTC continues to insist that federal commodities law pre-empts state gambling restrictions for regulated event contracts, while states and tribal gaming groups are pursuing the opposite interpretation.
With multiple lawsuits already under way and fresh federal rules still being developed, the question of who ultimately controls sports and other event-based prediction markets is increasingly likely to be decided through a combination of congressional action and major court rulings rather than regulation alone.