Prediction Markets in Texas: Legal Status

Status as of September 23, 2026

No Texas statute, order, regulator letter or court filing naming Kalshi, Polymarket or any other prediction-market venue was located in the searches described below. What the record does hold is older and more general. Texas Penal Code Section 47.02(a) makes it an offense to make a bet on the partial or final result of a game or contest, or on the result of any political nomination, appointment, or election (source 0), and Article III, Section 47 of the Texas Constitution directs the Legislature to pass laws prohibiting lotteries and gift enterprises other than the charitable bingo, charitable raffles and state lottery it carves out (source 1). Neither text mentions event contracts, derivatives or the Commodity Exchange Act, and this page does not say how either applies to a federally designated exchange, because no Texas court or agency document located here has said so.

The two venues that price Texas contracts on this site are both on the federal register. The CFTC's designated contract market list records Kalshi as designated on November 3, 2020, with its order modified on January 17, 2025 to permit intermediated futures trading, and QCX LLC, doing business as Polymarket US, as designated on July 9, 2025 (source 2). Each venue's own published terms are the only documents from the venues that speak to who may trade. Kalshi's Member Agreement, amended by exchange notice on November 4, 2025, lists foreign countries and sanctioned territories as Restricted Jurisdictions and names no U.S. state (sources 4 and 5). Polymarket's international site tells a visitor from the United States that trading is blocked on polymarket.com and points to Polymarket US, whose app terms, effective September 25, 2025, require a user to be legally permitted to access the exchange and name no state (sources 6 and 7).

What the record shows

The oldest document is the constitutional text. Article III, Section 47 dates from February 15, 1876 and has been amended six times, most recently on November 2, 2021, each time adding to or revising the exceptions for charitable bingo, charitable raffles, sports-team charitable foundations, savings promotions and the state lottery (source 1). The Penal Code chapter took effect on January 1, 1974 and defines a bet as an agreement to win or lose something of value solely or partially by chance, excluding insurance and prizes to actual contestants; Section 47.03, headed gambling promotion, separately makes it an offense to sell chances on the result of a game, contest or election, and Section 47.09 lists the authorized activities that are defenses, last amended effective June 20, 2025 (source 0).

The federal record is newer and specific to the venues. Kalshi's designation on November 3, 2020 and the January 17, 2025 modification, QCX LLC's designation on July 9, 2025 and ProphetX LLC's on June 11, 2026 all appear on the CFTC list read on September 23, 2026 (source 2). In the Fourth Circuit, thirty-eight states and the District of Columbia filed a brief on December 22, 2025 supporting Maryland's officials against Kalshi in KalshiEX LLC v. Martin, No. 25-1892; Texas is not a signatory, and the brief's one mention of Texas lists it among eleven states that, in the brief's words, "have kept sports betting illegal" (source 8). That is a Maryland case, and Texas is neither a party nor an amicus in it.

In Texas the action so far is legislative study. Lieutenant Governor Dan Patrick's 2026 interim charges, dated March 27, 2026, direct the Senate Committee on State Affairs to "study the sudden inundation of prediction market gambling and the exploitation of federal law to circumvent Texas gambling prohibitions by allowing users to place bets on the outcome of elections and other events," to examine the relationship between federally regulated derivative markets and state-prohibited gambling, and to make recommendations "to ensure the integrity of Texas elections and Texas sports" (source 9). The committee's posted notice set a public hearing on that charge for 9:00 AM on September 15, 2026 in the Capitol Extension, with public and invited testimony (source 10); no minutes or witness list for it had been posted on the Legislature's document site by September 23, 2026. A charge is a study instruction, not a statute, and the gambling chapter as published through the 89th Legislature's second called session carries no prediction-market provision (source 0).

What is not documented

No Texas-specific primary record naming either venue was located as of September 23, 2026, so this page draws no conclusion about Kalshi or Polymarket in Texas; the search is repeated on October 7, 2026. The search covered the RECAP archive for the Northern, Southern, Eastern and Western Districts of Texas and the Fifth Circuit, where a query for Kalshi returned no docket, document or opinion (source 3), and a query for the phrase "prediction market" returned Clarke v. Commodity Futures Trading Commission, a Western District of Texas matter filed September 9, 2022 and again June 4, 2024, together with its Fifth Circuit appeal, none of which names Kalshi or Polymarket (source 11). No Attorney General opinion, press release or filing naming a prediction market was found on the Attorney General's site, whose search function did not answer; the Texas Lottery Commission's site did not respond, and the Texas Racing Commission's site carries nothing on the subject. Those are gaps in what could be read, not findings that nothing exists.

What happens next

Two dates on this page are fixed by documents. The Senate Committee on State Affairs was noticed to take testimony on its charge on September 15, 2026, and its recommendations are owed under the interim charge process, whose document sets no reporting date; none is asserted here (source 9). This page is reviewed again on October 7, 2026, and sooner if a filing, order, regulator notice or venue notice naming Texas appears. On the venue side, Kalshi's notice reserves the right to change its restricted list at any time (source 5), and Polymarket's app terms say the company may modify them at any time (source 7), so each venue's own document is re-read at every review. Nothing here forecasts what the committee, the Legislature, a regulator or a court will decide.

What this page does not do

This page is not legal advice, and nothing on this site is. It does not say whether any person may lawfully trade on any venue from Texas, does not characterize a contract as a bet or as a derivative, does not address tax treatment, and does not predict how the Senate committee, the Legislature, a regulator or a court will act. It reports documents by name and date, quotes the operative words where the document itself supplies them, and states plainly where the record is silent. The review interval is 14 days, with an immediate re-read on any filing, ruling, regulator action or venue notice that names Texas. A correction, when one is needed, is made on the page with the date of the change.