When it comes to gambling, Texas has some of the strictest laws in the country.

But that has not stopped high-profile Republicans appearing on the state’s November ballot from accepting thousands of dollars from the prediction market giant Kalshi and its CEO ahead of this fall’s midterm elections.

Texas Attorney General Ken Paxton has long been an enforcer of the rigid Texas laws that outlaw sports betting, gambling and wagers placed “on the partial or final result of a game or contest.” But since launching his campaign for the U.S. Senate, the Republican nominee has taken at least $12,000 worth of campaign contributions from Kalshi and its founder, Tarek Mansour, according to federal campaign finance records.

Texas Gov. Greg Abbott, who is locked in a closely contested re-election bid, received a $50,000 donation from Mansour in September, according to the most recent state campaign finance reports.

The donations from Kalshi and its chief executive are part of a broader lobbying push by the company to shore up state-level influence as the legal battle over the future of prediction markets heads for the Supreme Court. Mansour and his co-founder, Luana Lopes Lara, created a Texas-focused general purpose political action committee and infused it with $200,000 in September — a week after state lawmakers held interim hearings to investigate whether online prediction markets constitute illegal sports betting.

“Like many U.S. regulated companies, we support candidates on both sides of the aisle,” Kalshi spokesperson Elisabeth Diana said when asked for comment on the Texas spending. Kalshi has also lobbied heavily in California and New York, where leadership is Democratic. The company has led industry spending on lobbying this year, and has donated more than $100,000 each to Republican and Democratic attorneys general and governors associations.

At issue is who has the power to police the nascent industry: federal commodities regulators, as Kalshi and other major prediction markets insist, or the states in which they operate. The majority of state attorneys general have made the case this year that the online platform’s sports-related event contracts are a form of illegal betting that violates local gambling laws and siphons valuable tax revenue.

Currently, prediction markets are federally regulated under the Commodity Futures Trading Commission. States have historically held jurisdiction over gambling, but President Donald Trump and his administration have rejected that precedent.

The CFTC has taken aggressive measures to cement federal control over prediction markets. The agency under its Trump-appointed chair, Michael Selig, has sued nine states with Democratic governors this year to stop their attempts to crack down on the markets. The CFTC has sided with Kalshi in lawsuits brought by states against the exchange and has twice invoked rarely used emergency powers to instruct Kalshi to ignore court orders in Michigan and New York that would have halted its operations.

Paxton, who won the Republican nomination due in large part to Trump’s endorsement, has been notably absent from bipartisan efforts by state attorneys general to move regulation of the markets under their control. Politico first reported that Paxton, days after accepting a $7,000 donation from Mansour in June, declined to sign a brief submitted by 34 attorneys general to the Third Circuit Court of Appeals in Philadelphia, in which they asked for the right to regulate Kalshi.

Paxton’s name was also absent from a fiery letter 44 Republican and Democratic state attorneys general sent to the CFTC in August, arguing that a proposed rule to federally regulate the markets would take “a sledgehammer to the States’ historic power” and hand the federal government “a virtual veto over state policies.”

Paxton’s choice to sit out the nationwide brawl over control of the markets appears at odds with his past enforcement of anti-gambling laws, which included a court battle with the fantasy sports platform DraftKings after he determined that paid daily fantasy sports were illegal under Texas law. But his absence from the issue now does align with the position of the Trump administration.

“It is critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive,” Trump wrote in a post on Truth Social in May.

Trump’s family holds direct financial ties to Kalshi and Polymarket, its largest competitor. Trump’s oldest son, Donald Trump Jr., sits on the board of advisers of both companies, and he holds a large volume of shares in Kalshi and has invested in Polymarket through his venture capital firm, 1789 Capital. He has denied that his ties to the prediction markets have influenced federal policies or enforcement actions.

Abbott has been friendlier to the idea of legalizing gambling in Texas throughout his 11 years as the state’s governor. He said in an interview last year that he has no objection to the Texas state Legislature legalizing online sports betting. Lt. Gov. Dan Patrick, however, has taken a tighter approach. He directed the Texas Senate in March to explore ways to close the “gambling loopholes” that currently allow Kalshi to operate in the state.

The campaigns for Abbott and Paxton did not respond to MS NOW’s multiple requests for comment. The Texas attorney general’s office did not respond to MS NOW’s request for comment, nor did Paxton’s Lone Star Liberty PAC.

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