Texas Lawmakers Press Kalshi and AGA on Prediction Markets

Texas lawmakers grilled Kalshi and the American Gaming Association (AGA) this week during a pair of contentious interim hearings on prediction markets, according to Legal Sports Report.

Why It Matters

Texas represents one of the largest untapped gambling markets in the United States, and how its legislature frames prediction markets — as financial instruments or gambling products — will set a precedent other states are watching closely. Kalshi, which operates under CFTC oversight, argues its contracts fall outside state gambling jurisdiction; the AGA, representing traditional sportsbook operators, pushed back hard. The tension between federal and state authority over prediction markets is unresolved nationally, and a hostile Texas posture could accelerate calls for federal preemption legislation. For bettors and operators alike, the outcome shapes whether prediction markets expand or face a patchwork of state-level bans. Gambling involves real financial risk regardless of the regulatory label attached to the product.