Texas Lt. Gov. Patrick Targets Prediction Market Gambling Loophole

In March 2026, Texas Lt. Gov. Dan Patrick directed the Senate State Affairs Committee to investigate prediction markets like Kalshi and Polymarket, labeling them a 'gambling loophole' that circumvents the state's strict prohibitions on betting. As presiding officer of the Texas Senate, Patrick, a longtime foe of expanded gambling, tasked senators with studying how these platforms enable wagers on Texas-specific events, including Houston Astros games and the Republican runoff for attorney general. He urged preparations for the 2027 legislative session to protect election integrity and sports from manipulation, though the committee has no meetings scheduled yet.

Prediction markets exploded in the U.S. after 2025, offering 'event contracts' on outcomes from weather patterns to political races and sports scores, drawing Texans into a shadowy betting arena long banned in the state. Platforms let users speculate on local stakes, such as the number of strikeouts in an Astros ballgame at Minute Maid Park, raising alarms in a state where sports like high school football and college rivalries define communities from Austin to Amarillo. Patrick's move marks the first official state acknowledgment of these operations, amid Patrick's history of blocking sports betting and casino expansions.

Federal hurdles loom large: The Commodity Futures Trading Commission, bolstered under the Trump administration, claims exclusive oversight and has sued five states to block their gambling crackdowns on prediction markets, including a lawsuit filed Tuesday against Wisconsin. On Thursday, the National Conference of State Legislatures, representing Texas lawmakers, urged the CFTC to defer sports-related event contracts to state gambling laws. Texas senators could subpoena operators for data on local usage, but any 2027 bills face steep legal battles from Washington.