Opposition To Prediction Markets In Texas Gets Unlikely Ally

The rise of prediction markets has been the dominant story of the legal sports betting industry the last year. However, one massive state has mostly been sidelined on the discussion.

Of course, we’re talking about Texas. Prediction markets like Kalshi work completely fine in the Lone Star State. On the platform, users can put money on the outcome of the Cowboys’ 2026 season, despite sports betting in Texas being illegal.

Lawmakers in the state stayed mum on the issue for the better part of a year until this March. That’s when Lt. Gov. Dan Patrick told state senators to close “gambling loopholes” that allow Kalshi to operate freely inside Texas. Good intentions, but it may be harder to do since prediction markets are federally regulated, and states largely can’t do anything about it.

But now another group has come out against prediction markets, and this one is not who you’d expect. It’s not a sports teams in the state. It’s not any of the top sports betting apps, which can’t access Texas, but rival prediction markets can. It’s actually a medical group. Yes, keep on reading, and we’ll tell you the latest news.

Texas Doctors Want Guardrails Put On Prediction Markets

Get this, the unlikely new opponent is the Texas Medical Association. They just happen to be one of the largest and most influential doctor groups in the state, and they’re asking for big, big changes to prediction markets.

First of all, the organization wants lawmakers to require prediction market users to be at least 21 years old, while also placing tighter restrictions on where and how companies like Kalshi and Polymarket can advertise. That includes limiting ads near schools and parks, along with promotions on social media, video games, and other places where teenagers are likely to see them.

“It is not considered gambling [by legal definition], although it has all of the psychological trappings of gambling,” said Lindy McGee, MD, former chair of TMA’s Committee on Child and Adolescent Health. “The adolescent brain is primed to take risks.. the younger you start, the more likely you are to become addicted to it.”

The age issue is another pandora’s box opener, if you will. Legal sportsbooks in the U.S. overwhelmingly require bettors to be 21, but federally regulated prediction markets can generally accept users at 18. This double standard is one of many that regulators and apps point out, and so far, to no avail (more on this soon).

But going back to the doctors, recent research suggests they may have a point. University of Texas professor Michael Sierra-Arévalo said 45 percent of college students in one study had bet on sports during the previous year, and some of them were under the legal age. The stat goes to show how normalized betting is now, a far cry from 20 years ago when this stuff was largely taboo outside Nevada.

Last but not least, the TMA also wants to ban prediction market advertisements using celebrities, cartoons, and characters from shows or games marketed toward children. That is probably where the industry will push back hardest because advertising is how these companies spread like wildfire. As it stands, the likes of Logan Paul and Leo Messi, among others, openly endorse this stuff, two figures with huge fan bases of tweens.

We don’t know how much political sway TMA actually has here, but it’s just interesting to see them opposing prediction markets, too. But as we’ll write in the next section, it might be completely out of their hands either way.

Texas Might Not Have Much Say

Here’s the issue: Texas and/or doctors can demand all the guardrails it wants, but states (or any opponents for that matter) haven’t had much success forcing prediction markets to follow local gambling laws.

Nevada, New Jersey, Maryland, Washington, and several other states have sent cease-and-desist letters or filed lawsuits against Kalshi. Their argument is basically the same one Patrick is making — these platforms are offering sports betting under a different name and bypassing the rules every state has set for itself.

So far though, prediction markets are still operating in all of those states. Kalshi argues its event contracts fall under federal commodities law, not state gambling law. That gives the company a powerful shield because it is regulated by the Commodity Futures Trading Commission, better known as the CFTC.

The federal government is not exactly rushing to help the states either. The CFTC has defended its authority over event contracts and has even counter-sued states trying to block them. That turns this into something much bigger than Texas vs. Kalshi, or any single state for that matter.

And the Trump administration has openly warmed up to the industry, too. Trump’s son, Don Jr., is an advisor to Kalshi and got equity in the company for it. Moreover, the Trump media company has openly explored launching a prediction market product, so it’s safe to say this administration is not leading the charge to shut them down.

That leaves Texas in an awkward position. Lawmakers can call these platforms a loophole, and doctors can demand age limits and advertising restrictions, but unless Congress changes the law or federal courts side with the states, Texas may have to watch all this from the sidelines.