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AUSTIN, Texas (Gambling911.com) - Long time readers of Gambling911.com know that Texas Attorney General has long stood in the way of gambling regulation in the Lone Star State. That's changed since he entered the senate race..... at least as it applies to prediction markets.
States across the U.S. have been waging wars in the courts against the likes of Kalshi and Polymarket.
Not Texas.
As that state's attorney general, Republican Ken Paxton pushed hard for strict enforcement of Texas gambling laws, especially for fantasy sports sites and gaming machines. He stood in the way of any attempts to regulate sports betting.
Then a funny thing happened. Paxton and his PAC took thousands of dollars from Kalshi and its CEO, according to Politico. The attorney general declined to sign onto several nationwide efforts by Republican and Democratic state attorneys general to rein in the prediction market platform.
From the Politico report:
May 2025, Kalshi donated $5,000 to Paxton’s Lone Star Liberty PAC and a month later, on June 13, the Republican Senate candidate accepted $7,000 from Tarek Mansour, the CEO of Kalshi, according to FEC records.
Four days later, 34 Republican and Democratic state attorneys general asked the Third Circuit Court of Appeals to allow states to regulate Kalshi. But Paxton didn’t join the bipartisan effort, which included Ohio, Illinois, Pennsylvania, South Carolina and Utah. Last December, Paxton also declined to team up on an amicus brief filed by 38 states and D.C., in a case between Kalshi and Maryland.
The decision to not sign on to these briefs was unusual, given Paxton’s position on fantasy sports a decade before when he was not running for office. At the time, he determined that operators of fantasy sports platforms DraftKings and FanDuel were taking illegal bets, which led to a fight in court between the DraftKings and Paxton that the company recently dropped. Texas is still one of the less than a dozen states that outlaw online sports betting.
The administration of U.S. President Donald Trump has been highly supportive of the prediction market sector. Kalshi is licensed by the Commodity Futures Trading Commission (CFTC). Under Chairman Michael Selig's leadership, the CFTC has actively defended its "exclusive jurisdiction" over Kalshi's event contracts. This stance has put the federal agency at odds with various state attorneys general and state gaming commissions, including the likes of New York, Massachusetts, Washington, Kentucky, Utah and Nevada. Each have attempted to block or penalize Kalshi for operating without state-level gambling licenses.
You will also notice that this is in no way a "red/blue" stance. States attempting to block Kalshi include the rubiest of red Massachusetts to some of the most conservative states like Utah and Kentucky.
The president's son, Don Jr., serves as a paid strategic adviser and equity holder with Kalshi.
And the relationship between Paxton and Trump is a solid one.
Trump waited until May 19, 2026, just one week before the Texas Republican runoff—and after early voting had already begun—to endorse Paxton over incumbent Sen. John Cornyn. Senate Republican leaders had been lobbying Trump to do essentially the opposite.
Trump said Paxton had "always been extremely loyal" to him and the MAGA movement. By contrast, Trump acknowledged that Cornyn was a "good man" but complained that Cornyn hadn't supported him when things were difficult and had been late endorsing Trump's 2024 presidential campaign.
But Paxton is widely viewed as a more "flawed" candidate when compared to Cornyn.
The Republican-controlled Texas House sought to impeach Paxton in 2023 on allegations that included bribery, abuse of office and misuse of public resources, though he was subsequently acquitted on all 16 articles tried by the Republican-controlled Texas Senate.
Eight senior employees in Paxton's own attorney general's office went to law enforcement in 2020 alleging that he had abused his office to assist donor Nate Paul. Those allegations eventually became central to the impeachment. Paxton denied wrongdoing, and the Justice Department ultimately declined to prosecute him in connection with the federal investigation.
Then there was a highly publicized extramarital-affair issue. The Paul controversy became intertwined with allegations concerning a woman with whom Paxton acknowledged having an affair and who worked for Paul. Angela Paxton's own divorce petition specifically alleged that Ken Paxton “has committed adultery.”
Paxton is currently locked in a highly competitive U.S. Senate race against Democrat James Talarico. While Kalshi gives Paxton a 50.4% chance of winning, BetOnline moved the odds for both candidates to -110 in recent days, making this one a virtual dead heat. Lloyd Bentsen was the last Democrat elected to the U.S. Senate from Texas in 1988.
T.C. Jackson, Gambling911.com
