New federal election filings have put a spotlight on Kalshi Paxton donations, showing that the prediction market company and its leadership sent thousands of dollars toward Texas Attorney General Ken Paxton right as he stayed quiet on a growing multistate push to regulate the platform. The amounts are modest by campaign finance standards. The timing is what has drawn attention.
What the FEC Filings Show
According to the records, Kalshi gave $5,000 to Paxton’s Lone Star Liberty PAC in May 2025. A month later, Kalshi co-founder and CEO Tarek Mansour personally donated $7,000 to Paxton’s U.S. Senate campaign. Together with other contributions to Texas politicians, the company and its executives have given at least $22,600 to officials in the state.
Four days after Mansour’s donation landed, 34 state attorneys general from both parties asked a federal appeals court to affirm that states have the authority to regulate Kalshi. Paxton did not sign on. He also sat out a separate brief filed by 38 states and Washington, D.C. in a related case involving Kalshi and Maryland.
Paxton’s Gambling Record Doesn’t Match His Silence
The contrast matters because Paxton has a long paper trail on gambling enforcement. A decade ago, as attorney general, he ruled that daily fantasy sports operators like DraftKings and FanDuel were accepting illegal bets under Texas law. That stance eventually pushed FanDuel to stop taking paid entries in the state. Texas remains one of fewer than a dozen states that still bans online sports betting outright.
Given that history, Paxton declining to join dozens of his counterparts against Kalshi stands out. A spokesman for Lone Star Liberty PAC told reporters that Paxton has “fought at every turn to protect Texas men, women, and children” from large corporations, without directly addressing the donations. Neither his Senate campaign nor his attorney general’s office has offered further comment.
A Pattern Beyond One State Official
The Paxton donations aren’t an isolated gesture. Mansour and Kalshi co-founder Luana Lopes Lara have contributed more than $1 million combined in the 2026 election cycle, with more of that money flowing to Republican candidates and committees than Democratic ones. The company also created a new Texas-focused political action committee and funded it with $200,000 in September, just a week after state lawmakers held interim hearings on whether prediction markets count as illegal sports betting under Texas law.
Those hearings were not quiet affairs. Lawmakers pressed representatives from Kalshi and the American Gaming Association on how prediction markets function in a state where sports betting is banned. Kalshi’s side argued the product is already covered by federal oversight through the Commodity Futures Trading Commission, so state-level rules would be redundant. The gaming association pushed back, arguing the contracts function like regulated sportsbook bets and should be geofenced out of Texas or challenged in state court. State Senator Bob Hall indicated afterward that lawmakers intend to pursue legislation addressing the issue in the 2027 session.
Why Texas Still Matters for Kalshi
Texas is a useful test case because it sits at the intersection of two pressures Kalshi is fighting nationally: state attorneys general arguing for gambling-style oversight, and a parallel federal debate over whether the CFTC has exclusive jurisdiction over these contracts. We’ve covered how that federal jurisdiction question is playing out through Missouri’s cease-and-desist orders against Polymarket and Kalshi, and a similar standoff is unfolding in Washington State’s geofencing dispute with Kalshi. Texas adds a political layer to that legal fight: if a state’s top law enforcement official has financial ties to the company he would otherwise be investigating, that undercuts the argument that prediction markets face uniform scrutiny.
None of this proves a direct exchange of favors for silence. Campaign donations to sitting attorneys general are legal and common across industries, and Paxton’s office has not explained its reasoning either way. But the optics work against Kalshi’s broader messaging, which has leaned on the idea that it operates as a neutral, federally regulated exchange rather than a political actor courting friendly state officials.
What Happens Next
With the 2027 Texas legislative session approaching and Senator Hall signaling intent to introduce a bill, the question is whether Paxton’s office takes a public position before lawmakers act, or continues to avoid the fight entirely. Other states have already moved past internal debate and into litigation and cease-and-desist orders. Texas, so far, has not. The donations don’t guarantee that outcome continues, but they help explain why the state’s most visible law enforcement figure has had so little to say about a fight nearly three dozen of his peers have already joined.
For readers tracking the regulatory side of this industry rather than just the trading side, the Texas situation is a reminder that prediction markets are being shaped as much by state capitols and campaign finance reports as by courtrooms or the CFTC.
