Texas and Georgia attorneys general prepare state-level challenges to prediction markets

Newly elected attorneys general in Texas and Georgia are preparing state-level enforcement actions against prediction market operators, according to Gambling Insider, as the industry's federal preemption argument faces its first test from Republican-controlled state offices that did not participate in the original Utah litigation.

The threat is structurally different from Utah's. Utah prosecutors pursued criminal charges against Kalshi executives, a path that produced a federal injunction and accelerated the preemption argument. Texas and Georgia are expected to pursue civil enforcement under state consumer protection and gambling statutes, which sit in a different jurisdictional posture and may not trigger the same federal preemption response.

The Illinois injunction, which bars state enforcement of prediction market laws where CFTC-approved contracts are operating, applies in the Seventh Circuit. Texas is in the Fifth. Georgia is in the Eleventh. Neither is bound by that ruling, and neither circuit has addressed the preemption question directly.