Texas Sees Surge in Sports Betting via DFS and Prediction Apps

The football season began on August 23 for NCAA College Football and September 4 for the National Football League, which automatically translated to a significant rise in the number of ads promoting gambling apps. Texans were, to many’s surprise, not left behind, even though no new legislation to legalize sports betting was passed this year. 

Flooded with Football Betting Ads 

According to The Texas Tribune, despite the lack of new regulations, prediction markets have bombarded the people of Texas with a series of sports betting advertisements claiming that wagering on football is currently legal in the Lone Star State. For instance, Polymarket has stated, “football trading is now legal” in Texas. Similarly, Kalshi’s Instagram ads show texts that read, “I found a way to bet on the NFL even though we live in Texas.”

These platforms, along with daily fantasy sports (DFS), offer alternatives to traditional sportsbooks, enabling residents to wager on outcomes without technically breaking state law. This is because both rely on federal regulations instead of state gambling statutes, with prediction markets handled as financial transactions regulated by the Commodity Futures Trading Commission, and DFS games classified as skill-based contests.

While efforts to regulate DFS and sports gambling have repeatedly stalled, leaving the legal landscape murky, the people of Texas have easy access to these services online, with DFS and prediction markets offering peer-to-peer wagering rather than betting against the house.

Jack Such, Kalshi’s head of media operations, argued that people already find ways to gamble, noting in states where sports betting is deemed outside the law, including California and Texas, “most people will just go to an offshore book instead”. 

Such defend the language in ads, saying terms like “bet, trade, invest, gamble” are largely semantic.

“Pretty Much Identical” to Classic Betting 

Experts say that, despite operators claiming the opposite, these offerings do resemble sports betting. Gregory Gemignani, a gaming law professor at UNLV, described DFS and prediction markets as “pretty much identical” to traditional wagering, blending fantasy sports or futures trading with gambling mechanics.

Prediction markets surged during the 2024 presidential election, with apps offering “event contracts” that let players wager on yes/no outcomes, ranging from NFL matchups to political races. 

Kalshi chief executive officer Tarek Mansour reported over $441 million in trades in just four days after the NFL season began, with NFL week 1 similar to a US election. 

DFS games, which operate similarly, let users set up lineups of two or more athletes and wager on their performance in short-term contests. Other operators emphasize that the games are based on skill, offer peer-to-peer experiences, and are, therefore, federally exempt from any gambling prohibitions.

With poor enforcement measures on behalf of state authorities, Texans have no problem freely accessing these alternatives, even as lawmakers have cracked down on other online gambling activities, including lottery ticket courier apps. Rep. César Blanco reiterated the need for clearer regulations that would pull these options out of their gray area while offering better player protection and curbing illegal offshore betting.