Texas Lt. Gov. Dan Patrick Wants Senators To Review Prediction Markets

Texas Lt. Gov. Dan Patrick has turned his attention to prediction markets after years of blocking sports betting efforts in the state. His latest Senate directive asks lawmakers to study platforms such as Kalshi and Polymarket and look at ways to close what he calls gambling loopholes.

Good to Know

• Prediction markets let users trade contracts tied to outcomes in sports, politics, finance, entertainment, and other events.
• Dan Patrick asked Texas senators to review how federally regulated derivative markets interact with state gambling bans.
• The directive names election integrity and Texas sports as key areas for lawmakers to protect.

Prediction Markets Face A New Texas Challenge

Dan Patrick has long made clear that gambling expansion will not pass easily through the Texas Senate. Now, the Republican lieutenant governor wants lawmakers to look beyond traditional sports betting and casino bills.

In a March directive to the State Affairs Committee, Patrick listed “Closing Gambling Loopholes” as one of eight study items. His instruction focused on prediction platforms that operate without state gambling licenses, including Kalshi and Polymarket.

Patrick wrote:

“Examine the relationship between federally regulated derivative markets and state-prohibited gambling,”

He also told senators to:

“Make recommendations to ensure the integrity of Texas elections and Texas sports.”

Prediction market operators argue that their products do not count as gambling. They often frame the platforms as event contracts or derivatives, where users trade on future outcomes rather than place standard wagers. Still, the products have drawn attention from gaming regulators and lawmakers who see little difference once users put money behind predictions on sports, politics, entertainment, or financial events.

Patrick used stronger language in the directive, pointing to a “sudden inundation of prediction market gambling and the exploitation of federal law.” That wording gives the State Affairs Committee a clear political lane: find where federal market rules end and Texas gambling restrictions begin.

The review also fits with Patrick and his record in Austin. As lieutenant governor, he controls much of the Senate agenda and has repeatedly blocked pro-sports betting proposals, even as the House has shown more openness to legal wagering.

No other section of the directive focused on gambling. The remaining items covered election systems, pro-life practices, fair banking, court independence, alcohol sales consumer protection, and monitoring other state issues.

For Kalshi, Polymarket, and similar prediction platforms, Texas could become another hard state-level test. Patrick has not asked for a single bill yet, but his request gives senators a starting point for new restrictions before the next legislative fight.