Four days after Kalshi’s CEO sent Paxton’s campaign $7,000, Paxton began sitting out every multistate effort to rein in Kalshi

What happened

On May 16, 2025, Kalshi Inc. gave $5,000 to Lone Star Liberty PAC, the super PAC supporting Paxton. ^{02 03} On June 13, 2025, Kalshi CEO and founder Tarek Mansour gave $7,000 to Ken Paxton for Senate. ⁰¹ A Houston Chronicle review of FEC records found Paxton was the largest recipient of Kalshi-linked money among Texas candidates. ⁰⁹

Four days after the CEO’s check, on June 17, 2025, 34 Republican and Democratic attorneys general asked the Third Circuit Court of Appeals to let states regulate Kalshi. Paxton didn’t join. In December 2025, he also stayed out of a brief filed by 38 states and D.C. in Kalshi’s case against Maryland. ¹⁰

In March and April 2026, the National Association of Attorneys General and Ohio’s attorney general asked Texas to join legal briefs arguing that states can regulate prediction markets. Paxton’s office did not respond to the first request, and Texas joined neither. ⁰⁴ On April 24, 2026, 38 attorneys general backed Massachusetts against Kalshi, and Texas was absent. ⁰⁵

In June 2026, Paxton’s own office said Texas gambling law covers devices where “chance plays any role.” Two days later, more than three dozen attorneys general backed Ohio’s right to enforce its gambling laws against Kalshi. Paxton was one of 12 who didn’t sign. ^{10 06}

On July 27, 2026, 44 state attorneys general told federal regulators they have no authority over sports-betting contracts. Texas was one of only five states that did not sign. ^{07 08}

When the Texas Tribune requested the office’s internal communications about prediction markets, the office refused, citing attorney-client privilege. ⁰⁴ His campaign declined to comment to Politico, and his office did not respond. ¹⁰

Why it matters

Texas is one of fewer than a dozen states that ban online sports betting. Paxton once declared fantasy sports sites illegal gambling, and Lt. Gov. Dan Patrick urged the Senate this year to close the loopholes that let prediction markets operate in Texas. ¹⁰ Yet after taking Kalshi money, Paxton stepped aside from a fight nearly every other state joined. ^{04 08}

His office will not release its records or explain its decisions. ^{04 08}

What the sources show

The donations come from Federal Election Commission filings. ^{01 02} Texas’s absence from each coalition is documented by Politico, other states’ official releases and news reporting. ^{10 05 06 07 08}