Texas eyes prediction market limits. The feds stand in the way.
The Texas Tribune • • business
Key Points:
- Texas Lt. Gov. Dan Patrick has directed state senators to explore closing "gambling loopholes" that allow online prediction markets to operate in Texas, citing concerns about election and sports event manipulation.
- Prediction markets, which let users wager on outcomes like elections and sports, are regulated federally by the Commodity Futures Trading Commission (CFTC), which has sued states attempting to impose their own restrictions.
- Texas has been slow to act compared to other states, with Attorney General Ken Paxton’s office not joining multi-state legal briefs challenging the CFTC’s sole regulatory authority over prediction markets.
- Opponents warn prediction markets resemble gambling and pose public health risks, including addiction and financial harm, especially as some markets allow betting on elections, raising sovereignty concerns.
- Meanwhile, major sportsbooks like DraftKings and FanDuel offer prediction market products accessible in Texas, despite state bans on online sports betting, complicating regulatory efforts amid ongoing federal-state jurisdiction disputes.
