Texas Attorney General Ken Paxton has spent years taking hardline positions against gambling. His office concluded that daily fantasy sports contests offered by DraftKings and FanDuel constituted illegal gambling under Texas law, a finding that produced years of litigation until the company dropped its suit against him. Texas remains one of fewer than a dozen states that prohibit online sports betting outright.
He has stayed out of the campaign against prediction markets, where nearly every other Republican and Democratic attorney general has signed on. Politico reported on 3 September that Kalshi gave $5,000 to Paxton’s Lone Star Liberty PAC in May 2025, followed a month later by $7,000 from Kalshi co-founder and CEO Tarek Mansour to Paxton’s Senate campaign — $12,000 in total, at a moment when Paxton is in a tight race against Democrat James Talarico. Neither the campaign nor the attorney general’s office commented on the report. The donations do not establish a quid pro quo, and the sum is small next to what Kalshi’s founders are spending elsewhere: Mansour and co-founder Luana Lopes Lara have put more than $1m into the 2026 cycle, weighted toward Republicans.
The signature that isn’t there
What is documented is the absence. In April, attorneys general from 38 states and the District of Columbia filed an amicus brief supporting Massachusetts’ challenge to Kalshi’s sports contracts. Reporting from Legal Sports Report, an industry trade outlet, puts the aligned group at 44 states, arguing that prediction market products are effectively unlicensed gambling — on grounds of consumer safeguards, tax revenue, sports integrity, and state and tribal authority over gaming. Texas is not among them, despite neighbouring Oklahoma, Louisiana and New Mexico joining.
Paxton’s office has also declined to join the suits challenging the Commodity Futures Trading Commission’s claim of exclusive federal authority over the industry, which is the legal theory the platforms depend on.
Why the venue matters
The jurisdiction fight is heading to the Supreme Court, and Texas would be bound by the outcome. Two federal appeals courts have split. The Third Circuit held that Kalshi’s sports contracts are CFTC-regulated swaps subject to exclusive federal jurisdiction, which shielded the company from New Jersey enforcement. The Ninth Circuit ruled the opposite in Nevada: the products are likely gambling contracts, and the Commodity Exchange Act does not prevent Nevada from enforcing its gaming laws. New Jersey has filed a petition asking the justices to review the Third Circuit decision.
Inside Texas, the state’s own anti-gambling faction is not waiting. In March, Lt. Gov. Dan Patrick directed the Senate State Affairs Committee to study what he called the “sudden inundation of prediction market gambling” and the exploitation of federal law that allows platforms to operate in Texas without a state gaming licence — including whether lawmakers should close the gaps that let event contracts list markets on sports, elections and other real-world outcomes. Recommendations are due ahead of the 2027 legislative session. Patrick’s position is that the products may be described as financial exchanges, but they look like gambling in a state that has otherwise chosen not to legalise online sports betting.
Who carries the cost
Paxton’s silence is not a neutral position. Texas bettors who want to wager on sports have a federally supervised route that the state never authorised, which means the state writes no rules for how those customers are treated, collects no revenue from the volume, and holds no authority over the integrity questions that come with event contracts on athletic outcomes. The state’s voters are being asked to take a national settlement on the question without their own top law enforcement officer participating in it — and the enforcement question in the country’s second-largest state is being settled by default rather than by argument.
The contributions are a small fact inside a larger one. The prediction market industry’s access to state-level decision-makers is being built now, in an election cycle where its founders have given a reported seven figures, and the officials who decline to act are part of the record.