Texas lawmakers consider oversight as Kalshi and Polymarket election markets draw heavy trading
Texas lawmakers are weighing new oversight measures for prediction markets as election contracts on Kalshi and Polymarket attract significant trading volume. Users on both platforms are trading on the state Senate race between Attorney General Ken Paxton and state Rep. James Talarico, with prediction markets showing Talarico leading. A person named Kagan described Kalshi as a federally regulated financial exchange where users trade on events in a way she compared to the stock market. The legislative attention signals expanding state scrutiny of the sector.
Kalshi and Polymarket now face legislative heat in a major state while defending their federal CFTC registration. Texas joins Ohio, Tennessee, and Missouri in the push to impose state-level gambling oversight on federally approved election contracts. Operators must budget for parallel compliance regimes: geofencing products, redesigning contracts, and lobbying in capitols while lawsuits multiply.
The NFL has already backed New Jersey's Supreme Court bid to cement state gambling framing, giving lawmakers a powerful commercial ally. Each new state that moves weakens the CFTC preemption shield for every registered platform. Kalshi's board member Quintenz is already fighting the gambling rebrand on a second front. A Texas oversight bill would give other large states a ready template.
Texas lawmakers to the growing set of state actors challenging CFTC-registered platforms, after courts in Ohio and Tennessee applied state gambling laws to Kalshi contracts and Missouri faces fresh litigation from Crypto.com and Novig.