Texas Senate grills Kalshi and gaming lobby on prediction markets
Texas senators held a hearing September 15 on prediction markets, pressing Kalshi and the American Gaming Association on sports contracts, election markets, consumer protections, and exchange mechanics. Witnesses debated whether platforms like Kalshi operate as derivatives markets or constitute sports gambling. The hearing reflects state-level scrutiny of event-contract platforms expanding into sports and political markets.
Texas is the largest state yet to examine whether CFTC-registered platforms can be regulated as gambling, and its legislature could follow Connecticut and Nevada toward enforcement. Kalshi now faces parallel pressure in multiple arenas: state hearings, Ninth Circuit losses, and CFTC demands to drop moneyline odds. Each new front splits legal resources and fragments the national market.
The Texas hearing gives state attorneys general a roadmap for action, even without immediate legislation. For traders, the pattern is clear: CFTC registration no longer guarantees uniform access, and each state that moves against platforms deepens the geographic patchwork of valid contracts. The Supreme Court remains the only off-ramp, with three petitions pending.
Texas joins the running conflict over whether CFTC registration shields platforms from state gambling law, alongside Nevada where Kalshi already lost its federal shield, Connecticut where nine platforms face halt orders, and Baltimore with parallel enforcement.