Texas Prioritise Prediction Markets In 2026 Interim Agenda

Texas Lieutenant Governor Dan Patrick has directed lawmakers to study prediction markets as part of the state’s 2026 interim legislative agenda. He tasked the Senate State Affairs Committee with reviewing what he described as the “sudden inundation” of prediction market gambling.

The directive focuses on how these platforms operate and whether they are using federal regulatory structures to bypass Texas gambling laws. State law prohibits most forms of wagering, yet prediction market platforms allow users to trade on the outcome of elections, sports, and other real-world events.

Lawmakers question link between trading and gambling

Prediction markets allow users to buy and sell contracts tied to future outcomes. Prices move based on perceived probabilities, similar to financial markets. Texas officials are concerned that the economic behaviour of these platforms mirrors traditional betting.

Patrick has called for a detailed review of “the relationship between federally regulated derivative markets and state-prohibited gambling.” The study will also aim to produce recommendations to “ensure the integrity of Texas elections and Texas sports.”

Lawmakers are examining whether these platforms could affect public confidence in elections or introduce risks in sports integrity.

Review aligns with Texas’ long-standing anti-gambling position

The move follows Texas’ consistent opposition to gambling expansion. Under Patrick’s leadership, the state Senate has repeatedly blocked attempts to legalise sports betting and expand casino operations. Texas remains one of the largest US states without a legal sports betting market.

Efforts to introduce commercial casinos have also failed to gain support. At the same time, regulators have increased scrutiny of unlicensed or “grey-area” gambling operations within the state.

Legal pressure builds across states and federal level

Texas is part of a wider national debate. Several states have moved to restrict or challenge prediction market platforms, while others are considering regulatory frameworks.

Prediction market platforms are facing lawsuits across the United States. Washington has sued Kalshi, alleging its platform constitutes illegal online gambling. Arizona has filed criminal charges related to unlicensed wagering. Nevada has temporarily blocked certain offerings, while Ohio has classified its sports-related contracts as gambling.

Polymarket has faced enforcement actions across Europe. Regulators in Hungary, Portugal, Ukraine, and the Netherlands have either restricted access or imposed penalties. Dutch authorities have ordered the platform to halt operations, warning of weekly fines for non-compliance.

At the federal level, the Commodity Futures Trading Commission maintains that prediction markets fall under its jurisdiction. Its chair, Michael Selig, has stated that federal authority applies and signalled that challenges from states may be contested in court.

Lawmakers in Washington are also moving to address the issue. Senators Adam Schiff and John Curtis have introduced the “Prediction Markets Are Gambling Act.” The bill would prevent federally regulated platforms from listing contracts that closely resemble sports betting or casino-style games.