Prediction Markets
in Texas
Texas is one of the most favorable large states for prediction market trading. All major CFTC-regulated platforms operate without documented state interference, and Texas has no state income tax: meaning event contract profits are taxed at federal rates only.
Which platforms are available in Texas?
| Platform | Status in TX | Notes |
|---|---|---|
| Kalshi | Available | CFTC-regulated DCM: operates freely in Texas. No state-level interference reported. |
| Polymarket | Waitlist | QCEX invite-only waitlist. Texas has not filed enforcement; full access expected Q3–Q4 2026. |
| Manifold | Available | Play-money and sweepstakes cash available in Texas. No state restriction. |
| PredictIt | Available | Politics-only, $850 per contract cap. Available in Texas. |
| Robinhood | Available | Sports and economic event contracts available in Texas. |
Why Texas is open for prediction markets
Prediction markets in Texas fall squarely under federal CFTC jurisdiction. The Texas Department of Banking and the Texas State Securities Board have not issued any guidance or enforcement actions against prediction market operators as of May 2026. Texas has historically taken a light-touch approach to financial innovation regulation.
When Wisconsin, New York, and Illinois moved against prediction market platforms in May 2026, Texas did not join. The political environment in Texas is generally favorable to financial innovation and resistant to heavy regulatory intervention in markets deemed to fall under federal oversight.
For Texas residents, the practical reality is straightforward: open an account on any CFTC-regulated platform, complete KYC, and trade. No documented state-level restrictions apply.
- Open a Kalshi account at kalshi.com: full access, no issues in Texas
- Join the Polymarket QCEX waitlist: Texas has no specific block
- Sports contracts via Kalshi or Robinhood are available in Texas
- Report winnings as ordinary income on your federal return only: Texas has no state income tax
Texas prediction market tax treatment
Texas has no state income tax. All event contract profits are subject only to federal taxation at ordinary income rates (up to 37% in the top bracket). This makes Texas one of the most tax-efficient states for prediction market trading: a high-earner in Texas keeps roughly 13.3 percentage points more of their prediction market profits than a high-earner in California.
Platforms like Kalshi issue annual 1099-MISC forms. You can deduct up to $3,000 of net losses per year against other income. The OBBBA (signed July 4, 2025) caps sports betting loss deductibility at 90% starting 2026.