Prediction Markets Rake In $335M From Texas Election Bets

^{Kalshi traders wagered nearly $200 million on the Texas Senate race, making individual political elections big business. (Screenshot via Kalshi.)}

Texas prohibits traditional sports betting and commercial casino gambling, but that didn't stop prediction market traders from pouring more than $330 million in trading volume on two of the state's biggest races this month.

Kalshi recorded over $305 million in trading volume on the Texas Senate and gubernatorial races, while Polymarket recorded over $29 million. Combined, the two platforms generated a staggering $334 million in activity.

The timing is notable. Polymarket told CNBC on Tuesday that its annualized revenue has topped $1.8 billion, up from a run rate above $1 billion in June. The growth is coming from its U.S. exchange, which processed more than $14.5 billion in notional volume in October.

The election also created an unexpected political development for the industry. Lieutenant Governor Dan Patrick, who had made closing prediction market gambling loopholes a priority for 2027, lost his reelection bid. Now, Texas prediction markets face an uncertain regulatory future as new leadership prepares to take office.

Texas Elections Generate More Than $330 Million in Trading

The Nov. 3 elections attracted heavy volume from prediction market traders, particularly in the Texas Senate and governor races. The U.S. Senate contest between Democrat James Talarico and Republican Ken Paxton generated nearly $198 million in trading volume on Kalshi. More than $113 million of that activity occurred on Election Day. Polymarket saw $21.79 million in volume.

The governor's race between incumbent Republican Greg Abbott and Democrat Gina Hinojosa generated $107.6 million in Kalshi volume, including about $89 million on Nov. 3. Polymarket generated $7.41 million.

Combined, the two platforms took in $334.65 million in trades. According to Ticker Tracker, approximately $239 million of Kalshi’s volume came in the week leading up to the election.

State Looks to Close Prediction Market Loopholes

Prediction market trading volume hasn’t gone unnoticed by Texas lawmakers. In March, Lt. Governor Dan Patrick directed the Senate State Affairs Committee to investigate the expansion of prediction market gambling in Texas. The directive called for lawmakers to examine how federal law might be used to circumvent existing Texas gambling restrictions. Patrick also sought recommendations on protecting the integrity of elections and sporting events, the two areas where prediction markets overlap most directly with activity the state already bans.

The committee's findings were expected to help shape legislation during the January 2027 session. Patrick's push to restrict prediction markets was consistent with his longstanding opposition to gambling expansion. During his tenure as lieutenant governor, he repeatedly blocked efforts to legalize sports betting and commercial casinos in Texas.

Patrick lost his reelection bid on Nov. 3, leaving the future of prediction market legislation uncertain as he laid the groundwork for lawmakers to craft legislation to target prediction markets. The next Texas legislative session begins in January 2027, allowing lawmakers to build on Patrick’s initiatives.

His successor, Vikki Goodwin, has a different relationship with gambling policy. While she has yet to comment publicly on prediction markets, she has openly supported letting Texans vote on gambling expansion in the past.

Will Texas Restrict Prediction Markets in 2027?

Given the trading volume tied to Texas’ midterm elections, one could argue that Texans and other Americans have voted with their dollars for prediction markets.

If Texas adopts restrictions, enforcement could prove complicated. Kalshi and other prediction market operators could challenge the measures in court, arguing that federal commodities regulations supersede state gambling laws. Several high-profile lawsuits are moving through the courts, and 2027 could prove a banner year for prediction market legislation.

One possibility is that incoming leadership takes a wait-and-see approach to current legal challenges. Lawmakers may continue examining the issue and proceed once regulatory authority over prediction markets is established.

Before Patrick's defeat, Texas appeared poised to pursue restrictions on prediction markets in 2027. Goodwin's support for letting voters decide gambling expansion raises questions about whether the new Senate leadership will pursue those restrictions with the same urgency.

The 2026 election demonstrated just how much interest prediction markets can generate. Over $330 million in trading volume on two Texas races is a significant figure for an industry that has only recently become widely accessible to American consumers.

Texas will now face regulatory challenges since it prohibits traditional sports betting. But prediction markets offer contracts tied to many of the same events for players in the state.

Patrick wanted lawmakers to address that situation in 2027. His defeat means someone else will determine how prominently the issue features on the Senate's agenda. For Kalshi and other prediction market operators, the election not only changed Texas's political leadership, but may also shape the next chapter of the state's gambling debate.