Texas AG Ken Paxton declines to join 44-state letter on prediction market authority
Texas Attorney General Ken Paxton declined to join a July letter in which 44 states asserted their authority to regulate prediction markets. Anti-gambling opponents criticized Paxton's silence while the coalition opposed federal rules governing the industry. Paxton has not publicly explained his decision. The letter addressed federal rules, but sources provided no details on the substance of those rules or the nature of the states' opposition.
Paxton's break from 44 peer attorneys general leaves a conspicuous gap in what would have been a unified state front against federal preemption. The states that signed the letter assert their gambling licensing laws should apply to prediction markets. Texas is the second-most-populous state and a politically influential voice on gaming policy; its absence weakens the collective bargaining position against CFTC-registered platforms.
Kalshi and Polymarket now face a fractured map where some state AGs coordinate and others freelanced. Paxton has offered no rationale, so operators cannot forecast whether Texas will later file independently or remain on the sidelines. For traders, the uncertainty means contract validity in Texas rests on a single unannounced decision.