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We all know Texas is the biggest domino left in the legal sports betting industry (along with California). All the top sports betting apps are absolutely salivating at the potential in the Lone Star State.
Here you have a state with around 31 million residents — the second-most in the country. Here you have a state that’s absolutely mad for sports, especially football. Here you have a state with a dozen pro sports teams, plus many more big-time colleges.
But despite all the lobbying efforts from these apps and even the Mavericks owner, Miriam Adelson, Texas lawmakers have not budged one bit. They are against legalized sports betting, no matter how much money is being thrown their way.
But what’s that old saying, “desperate times call for desperate measures”? Well, that’s where DraftKings is likely at. One of the top bookmakers has likely found an inroad into the Texas market, and it’s fully legal (for now). Keep on reading, and we’ll explain the groundbreaking news.
DraftKings Gets Into Prediction Markets
This is NOT official yet by any means, but… it’s widely believed that DraftKinhs is getting into the prediction market business. And launch by New Year’s Day too.
Again, this not confirmed yet, but news is coming out that DraftKings is indeed buying out Railbird Exchange, a CFTC-licensed event-contracts platform that trades in outcomes. “Contracts” means the thing is treated like stocks or commodities, not regular bets. Because of this, prediction markets can enter states without legal sports betting since they’re not one in the same.
Railbird isn’t your average startup either. It already had federal approval from the Commodity Futures Trading Commission, meaning its “event contracts” can legally be traded nationwide. That designation is huge because it lets DraftKings enter the entire country, and compete with Kalshi right away.
Details on the acquisition are being kept close to the vest — no purchase price, no revenue disclosures — but analysts are calling it a small upfront deal with bigger upside tied to performance. The real value isn’t in what Railbird is making now; it’s in what it enables. DraftKings now controls the infrastructure to offer trading on future outcomes, anything from award shows to political results and yes, sports outcomes too.
When the news hit (even just as a rumor), DraftKings’ stock jumped nearly five percent after hours. That tells you investors understood exactly what this means. Railbird gives DraftKings a regulated path into Texas and the other 10 states without legal betting. That’s big since they can’t continue to hope the states they’re currently in keep growing at double-digit clips, which isn’t sustainable.
Bottom line: prediction markers are about expanding the entire business, not just staying in one lane. Period. By bringing Railbird in-house (if it’s true), DraftKings is signaling to regulators, investors, and rivals that they want to be more than a traditional sportsbook. They want to be the market itself — where bets, trades, and speculation all live under one roof. The everything app, but for speculation, we suppose.
FanDuel Is Doing The Same
DraftKings is actually playing catch-up in the prediction market game. Its biggest competitor, FanDuel, is also expected to enter the marketplace.
FanDuel’s parent company, Flutter, signed a deal with CME Group back in August, teasing “new prediction products” and a plan to “expand access to financial markets for millions of FanDuel customers.” The statement was vague enough to avoid mentioning sports, but everyone in the room knew what it implied: Flutter wants in on the same event-contract game DraftKings is chasing.
Flutter hasn’t confirmed anything publicly yet. But given its partnership with CME — the largest futures exchange in the world — and its massive customer reach through FanDuel, a launch seems like a matter of when, not if.
Will Texas Fight Prediction Markets?
By early 2026, we could see the likes of DraftKings and FanDuel inside the Texas betting market, offering “sports contracts.” Texas bettors already have access to that through Kalshi.
But here’s the bigger question: will Texas politicians allow it? We’ve seen states like Maryland and Nevada fight back, saying these markets are illegally acting as unlicensed sports betting apps. Kalshi has countered, but those sides all have court dates pending.
Would Texas do the same? You’d have to think so, given their staunch opposition to legalized betting. Senate leader Dan Patrick has not been shy to voice his displeasure with the gambling industry. He’s no small voice either, so most in-state Republicans have followed suit.
The good news is Texas legislation only meets every other year. They met in 2025 already — and spent little to no time on betting matters. That means 2026 will be an off year before they reconvene in 2027.
Therefore, Texas bettors could have a “grace period” in 2026 when prediction markets are fully available. If the hammer on them is to come down, it would most likely be in 2027. That should be music to the ears of you Texas bettors that’ve largely been shunned from participating in the industry. Things are looking up… at least temporarily.
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